WASHINGTON — Retail apparel prices declined a seasonally adjusted 0.3 percent in October and fell 1.2 percent compared with a year earlier, the Labor Department said Wednesday in its Consumer Price Index.
Women’s apparel prices were down 0.9 percent month-to-month and dropped 1.9 percent year-to-year. Men’s apparel prices declined 0.3 percent in October and fell 0.4 percent from a year earlier.
Heavy discounting by retailers is driving apparel prices even lower than they have been in the past, said Charles McMillion, president and chief economist with MBG Information Services. Nominal apparel prices are currently below where they were in 1989, he said.
“Apparel is one of the best bargains out there,” McMillion said. “Forget about a new smartphone, go out and buy some apparel.”
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However, problems arise when consumers start to expect discounts all the time, he said.
“You build up expectations so that you really just can’t sell anything until it’s discounted,” McMillion added. “I think those expectations are there and retailers now have to cope with it.”
Apparel prices are likely to continue to decline for the next two months as retailers look to drive holiday sales, he noted.
Prices for all goods and services rose 0.2 percent in monthly comparisons and advanced 1.2 percent compared with a year earlier. The so called “core prices,” which exclude the volatile food and energy sectors, were flat in October. Core prices advanced 0.6 percent from October 2009, the smallest year-to-year increase since the index started in 1957.
“In competitive markets for goods and services there are absolutely no signs of any inflation pressure,” said Brian Bethune, chief U.S. financial economist with IHS Global Insight.
Men’s shirts and sweaters saw prices fall 0.2 percent in October and decline 1.7 percent year-over-year. Prices for men’s pants and shorts dropped 1.2 percent month-to-month and 2.4 percent compared with a year earlier.
Women’s outerwear prices fell 1.8 percent in October and declined 2.8 percent in 12-month comparisons. Dress prices dropped 0.2 percent month-to-month and 2.2 percent year-over-year. Prices for women’s suits and separates were down 1 percent compared with a month earlier and tumbled 4.1 percent compared with October 2009.