Byline: Jim Ostroff

WASHINGTON — Women’s apparel prices seem poised to take off after two years in the deflationary doldrums.
During March, retail prices for women’s apparel rose 0.7 percent, the Labor Department reported Friday. This was the largest single-month increase since October 1999, when these prices increased 0.8 percent.
Equally telling was that women’s apparel prices fell just 0.1 percent in March versus a year ago, which is “the smallest decline on a year-over-year basis since the deflation in these prices began in November 1998,” a Labor Department economist said.
In particular, the economist noted that the price boost is most pronounced for the segment that includes women’s suits and separates, whose retail prices jumped by 5.6 percent in March, up 2 percent from year-ago levels.
In addition, retail prices for women’s outerwear jumped by 4.7 percent last month and were up 0.2 percent for the year, and prices for women’s underwear, nightwear, sportswear and accessories rose 2.7 in March — 0.1 percent over March 1999 levels.
Overall, the Consumer Price Index saw retail prices for men’s, women’s and children’s apparel rise 0.3 percent in March and decline by 0.2 percent for the year.
Seeking to explain the seeming run-up in women’s apparel prices, the agency economist observed: “Consumer demand has been high for apparel goods in recent months and it seems that retailers are more comfortable trying to raise prices.”
The economist also noted that retail prices may have been buoyed by stronger gasoline and diesel fuel prices that have driven up importers’ and retailers’ costs.
“Of course, if Easter had fallen in March this year [instead of April], there probably would have been more sales and so the [inflation] number could have been smaller than it was for March,” the economist pointed out.
Higher fuel costs had an outsized effect on consumer prices for all sectors. They rose 0.7 percent in March, but would have been up 0.4 percent if excluding volatile energy prices and retail food costs, which are greatly influenced by fuel costs.
Based on data through March, the CPI for all sectors is up by 5.8 percent on an annualized basis, and apparel price inflation, led by women’s wear, is off by 2.7 percent. By contrast, transportation costs are soaring at a 16.9 percent annualized rate.
The March CPI report seems to confirm that retailers and women’s apparel makers are now entering yet another new economic cycle, vis-a-vis consumers, according to Carl Priestland, an apparel industry economist.
“In recent months, other government studies showed that the national savings rate was a negative number, which means that consumption was growing enormously,” Priestland said. “When consumers start demanding more — that is, buying more — then+ it means that retailers are getting a little better price from consumers.”
The Commerce Department last Thursday reported that all retail sales rose an unexpectedly robust 1.4 percent in March and for the first quarter are up 10.5 percent from the same quarter a year ago.
Much of this increase has been fueled by sharply higher apparel sales — up 2.3 percent in March and 7.4 percent from the same quarter in 1999.