Byline: Joanna Ramey

WASHINGTON — Women’s retail apparel prices in September shot up a seasonally adjusted 2.7 percent against August, the largest one-month increase in 10 years, the Labor Department reported Wednesday in its Consumer Price Index.
The leap in women’s retail apparel prices was also the second consecutive monthly increase after four months of declines. However, the shift in prices doesn’t necessarily signal renewed pricing power for retailers, according to analysts. Rather, they said the increases merely reflect higher prices of fall merchandise that were introduced during the month compared to August’s deep discounts.
“The pressure to constantly have sales is still there,” said Larry Horowitz, senior economist with Boston-based Primark Decision Economics. “It’s the mind-set of the consumer.”
To that point, women’s retail apparel prices last month were 0.6 percent below September 1999 levels.
Retail prices for all apparel last month were off 1.1 percent compared to last year, although they posted a 1.6 percent gain when compared to August. Prices for men’s apparel increased 1.1 percent for the month and declined 0.2 percent from September 1999.
The CPI is a closely watched measure of inflation. The index measuring prices for all retail goods shot up 0.5 percent in September, after declining 0.1 percent in August, which was the first drop in 14 years.
Absent the volatile energy and food sectors, the core rate of inflation last month increased 0.3 percent. This was still above the 0.2 percent monthly increases posted this year, with the exception of March when the core rate rose 0.4 percent.
Mary Kassis, associated director of the Economic Forecasting Center at Georgia State University, said the larger-than-expected increases in consumer prices overall won’t be sustained and so runaway inflation fears are unwarranted. She said energy prices are expected to ease, which will have an offsetting effect.
However, inflation will be a bit stronger this year over last, predicted Kassis, who expects retail prices overall to end the year 3.2 percent higher, compared to an increase of 2.7 percent in 1999.
As for apparel, Kassis forecasted retail prices at the end of the year to post a decline of 1.9 percent. However, because the dollar is expected to weaken against foreign currencies, Kassis said retail apparel prices should edge up in 2001, ending next year 0.5 percent ahead.
Meanwhile, in the categories of women’s apparel tracked by Labor analysts, prices for outerwear increased 0.9 percent for the month and were up 3.6 percent from year-ago levels, as prices for dresses increased 5.2 percent in September and declined 6.8 percent over the 12 months.
Retail prices for suits and separates increased 10.9 percent for the month and were unchanged from September 1999. Prices for underwear, nightwear, sportswear and accessories increased 1.3 percent in September and rose 0.8 percent over the year.

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