WASHINGTON — Retail apparel prices fell in September, driven by declines in the women’s and girls’ categories, the U.S. Labor Department’s Consumer Price Index showed on Thursday.
Overall apparel prices fell a seasonally adjusted 0.3 percent last month, following two months of increases.
Prices for women’s apparel fell 0.4 percent in September, while prices for girls’ apparel dropped 3.7 percent. Men’s apparel prices, on the other hand, posted a 2.1 percent increase last month while boys’ apparel prices edged up 0.1 percent.
“Overall consumers are doing very well,” said Ryan Sweet, director of real-time economics at Moody’s Analytics. “Real spending in the third quarter is expected to rise 3.5 percent but consumers seem to be spending on vehicles and not much else. That can contribute to some of the weakness in pricing power for apparel.”
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Sweet said the fundamentals are strong for consumers. Gas prices are lower, wages are picking up and the job market is “tightening.”
“You would anticipate stronger pricing power not only in apparel but in other segments of consumer spending. It just isn’t there,” Sweet said. “Part of it is a reflection of business reluctance to raise prices because they know the consumer is still very price-sensitive. If they raise prices it will come at the expense of sales.”
Sweet said an important metric is import volume, which has been very strong in recent months in the lead up to the holiday shopping season.
“It seems expectations are fairly high for the upcoming holiday season. Our forecast is it will be decent but not spectacular,” Sweet said. “At the tail end, that means there will be pricing power issues for retailers, who will have some overhang on inventories.”
In the women’s category, prices for dresses fell 2.9 percent, while prices for outerwear declined 2.4 percent. Prices for suits and separates fell 1.4 percent, while prices for the combined underwear, nightwear, sportswear and accessories category showed the only sign of strength in the category, rising 2.1 percent last month.
Men’s wear prices were led by shirts and sweaters which jumped 8.7 percent, followed by a 1.6 percent increase in prices for pants and shorts. There were some declines in the category, including a 3.9 percent drop in prices for sport coats and outerwear and a 1.3 percent decline in furnishings prices.
Prices for all goods sold at retail fell 0.2 percent, while core prices, excluding volatile food and energy pieces, rose 0.2 percent in September.
Chris G. Christopher, director of consumer economics at IHS Global Insight, said the good news in the report was that gasoline prices fell but the bad news was that rent and food prices moved up.
“The recent rise in food prices is difficult for many low-income households to swallow,” Christopher said..
“Consumer core goods prices were flat in September after four consecutive monthly decreases of 0.1 percent,” he noted. “In year-over-year terms, consumer core good prices fell 0.5 percent, not the best thing for retailers but a very strong positive for shoppers heading into the holiday season.”