Byline: Joanna Ramey

WASHINGTON — Deflation continued its grip on the women’s apparel industry during June, which saw retail prices for women’s apparel dip a seasonally adjusted 0.7 percent against May.
This marks the third consecutive monthly decline, the Labor Department reported Tuesday in its Consumer Price Index. Compared to June 1999, prices last month for women’s apparel were off 3.6 percent, the 20th straight month of year-over-year declines.
Likewise, all apparel prices in June fell. For the month, apparel prices declined 0.6 percent, off 2 percent from June 1999. Girls’ apparel prices were also down 0.7 percent for the month, but were up 1.5 percent over the year. Men’s apparel prices at retail fell 0.4 percent and were down 1.9 percent from June 1999.
“The combination of a lot of apparel being supplied from abroad and the stronger dollar has allowed for declines in apparel prices,” said Andrew Hodge, an economist and senior vice president with the WEFA group.
In the overall economy, prices for all retail goods edged up 0.6 percent, largely because of the increase in gasoline prices. When the volatile energy and food prices are removed, prices rose just 0.2 percent. Compared to June 1999, retail prices last month were up 3.7 percent.
The CPI is closely watched as a measure of inflation. Martin Regalia, chief economist with the U.S. Chamber of Commerce, said it’s difficult to say whether the June report might trigger another interest rate increase by the Federal Reserve in order to further slow the economy and keep inflation in check.
The effect of higher energy prices by itself may do more to keep overall prices from escalating, Regalia said, because “from the point of view of consumers, this increase in oil prices will mean more money spent at the gas pump than on other things.”
Early summer sales also conspired to keep prices down, an apparel analyst with the Labor Department said. In addition, “there is continued competition between the full-price and discounters,” the analyst said.
Broken down by category, outerwear prices increased 0.8 percent for the month and rose 3.8 percent from June 1999, while dresses were up 0.5 percent in June and down 10.5 percent over the year. Retail prices of suits and separates dropped 5.5 percent for the month and 3.6 percent against year-ago levels, and underwear, nightwear, sportswear and accessories fell 1.9 percent in June and 1.5 percent over the 12 months.

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