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Power Shift: Apparel Prices Up in Normally Promotional December

Retail apparel prices rose a seasonally adjusted 1.4 percent in December–unusual for the holiday period–but were still down 3.9 percent for the year as merchants lost pricing power during the demand-weakening coronavirus pandemic, the U.S. Bureau of Labor Statistics (BLS) reported Wednesday in its Consumer Price Index (CPI) report.

Save for a 0.8 percent dip in prices for infants’ and toddlers’, every apparel category increased in the month, while all sectors were down for the year except girl’s clothing.

Men’s apparel prices increased 2.4 percent last month compared with November. Prices for shirts and sweaters rose 4.8 percent; suits, sport coats and outerwear cost 4.6 percent more, and pants and shorts prices were up 0.7 percent. Bucking the trend was the underwear, nightwear, swimwear and accessories group with a 2.6 percent decline.

Women’s apparel prices rose 1.2 percent in December from the previous month, with increases in every sector again except the underwear, nightwear, swimwear and accessories group, which dipped 1.2 percent. An increase of 3.2 percent was seen in dresses, 3 percent in outerwear and 2.1 percent in suits and separates.

Boys’ and girls’ apparel prices were both up 2.3 percent for the month.

The overall CPI increased a seasonally adjusted 0.4 percent in December after rising 0.2 percent in November. The CPI rose 1.4 percent in 2020, smaller than the 2019 increase of 2.3 percent and the smallest December-to-December increase since the 0.7 percent rise in 2015.

The so-called core index, not including food and energy, was up 0.1 percent in December after rising 0.2 percent in the previous month. The indexes for apparel, motor vehicle insurance, new vehicles, personal care, and household furnishings and operations all rose in December, while the indexes for used cars and trucks, recreation, and medical care were among those to decline over the month.

The energy index, important for business operations, rose for the seventh month in a row in December, increasing 4 percent. The largest contribution to this increase was the gasoline index, which increased 8.4 percent in December after declining in the previous two months.

The index for electricity rose 0.4 percent over the month, while the index for natural gas fell 0.8 percent. Despite the monthly increase, the energy index fell 7 percent over the past 12 months.

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