WASHINGTON — Men’s and women’s apparel prices rose in July, while overall apparel prices remained flat, largely due to a sharp decline in girls’ apparel prices, the U.S. Labor Department’s Consumer Price Index showed Tuesday.
Women’s apparel prices increased a seasonally adjusted 0.4 percent last month, while men’s apparel prices were up 0.6 percent. Girls’ apparel prices fell 5.5 percent, while boys’ apparel prices rose 1.1 percent in July.
Within the women’s sector, suits and separates prices gained 0.8 percent last month, while outerwear prices increased 0.7 percent and the combined underwear, nightwear, sportswear and accessories category saw a 0.6 percent increase. Dresses were the only category to see a decline, with prices falling 0.8 percent.
In men’s wear, shirts and sweaters prices rose 1.5 percent, and pants and shorts prices increased 1.3 percent. Prices for the combined suits, sport coats and outerwear category were up 0.9 percent, while prices for furnishings fell 2.1 percent.
The overall CPI remained flat last month, driven primarily by a large decline in energy prices, while core prices, excluding food and energy, edged up 0.1 percent in July.
“I don’t think the apparel industry has a ton of pricing power,” said Ryan Sweet, director of real-time economics at Moody’s Analytics.
Despite some strength in men’s and women’s apparel prices, the “trend in apparel prices is still very, weak,” Sweet said.
“It’s not just isolated to apparel retailers,” Sweet said. “Overall, retailers are struggling with a lack of pricing power. That’s a big factor why nominal retail sales have generally been weaker than what would be expected, given the underlying fundamentals of the economy.”
“Consumer prices took a breather in July, but the pause is likely to be temporary,” said Chris G. Christopher Jr., director of IHS Global Insight. “Core consumer prices in July were weaker than expected. As a result, we are raising our estimate of third-quarter growth in real consumer spending to an annual rate of 3.3 percent from a 3.2 percent estimate.”
He attributed the moderation in core consume prices last month to “the stronger dollar adding downward pressure on consumer goods prices.”
Christopher said IHS estimates the July “core consumption price deflator,” which is monitored closely by the Federal Reserve, increased 0.1 percent for the month and 1.5 percent year-over-year.
“We expect core consumer inflation to pick up slightly in the coming months,” he said. “We expect slightly stronger core consumer price inflation than July’s reading, which, along with continuing gains in the labor market, suggest that the U.S. economy is on solid footing.”