Hit by overall inflation and higher raw material costs in the sector, retail apparel prices increased a seasonally adjusted 1.1 percent in January from the prior month and were up an unadjusted 5.3 percent compared to a year earlier, the U.S. Bureau of Labor Statistics (BLS) reported Thursday in its Consumer Price Index (CPI).
The uptick was seen in virtually every clothing category. Women’s apparel prices rose 0.7 percent last month, with increases of 6.5 percent in outerwear; 2 percent in the underwear, nightwear, swimwear and accessories group; 1.6 percent in dresses and 0.4 percent in suits and separates.
Men’s wear prices inched up 0.1 percent, with gains of 2.8 percent in suits, sport coats and outerwear; 2.4 percent in shirts and sweaters, and 2.2 percent in the underwear, nightwear, swimwear and accessories group. Bucking the trend was a 5.1 percent decline in what people paid for pants and shorts.
Girls’ clothing prices jumped 3.6 percent last month, while the cost of boys’ apparel increased 1.8 percent, and infants’ and toddlers’ clothes cost 4.2 percent more.
Footwear prices rose 0.7 percent in January, with increases of 2.4 percent in boys’ and girls’, 1.6 percent in men’s and 0.8 percent in women’s.
Home goods weren’t spared from higher prices, either. Retail prices for household furnishings and supplies were up 1.6 percent for the month and 9.3 percent for 12-month period. Furniture and bedding prices increased 2.4 percent in the month and were up 17 percent from January 2021.
E-commerce prices also fell victim to inflationary pressured last month. The Adobe Digital Price Index (DPI) showed online prices increased 2.7 percent year-over-year in January and 1.1 percent compared to December. Adobe said this marks the 20th consecutive month of year-over-year online inflation.
“While price drops in categories like electronics and apparel have brought online inflation down slightly from the record high last November, consumers are still contending with elevated prices in the digital economy,” said Patrick Brown, vice president of growth marketing and insights at Adobe. “This is particularly notable in a category like groceries, where online prices continue to hit new records, while consumer demand for online grocery shopping remains heightened.”
In January, 13 of the 18 categories tracked by the Adobe DPI saw year-over-year price increases, with apparel rising faster than any other category. For the month, 15 of the 18 categories posted price hikes, with price drops observed in three categories–apparel, medical equipment/supplies and flowers/related gifts.
The DPI for apparel was up 15.8 percent year-over-year and was down 1.7 percent from the holiday season, where prices increased 17.3 percent year-over-year in November and 16.6 percent in December. Adobe said the drop contributed to lower topline inflation for January, given the volume of e-commerce spending that occurs in this category.
The higher CPI for apparel stems from a variety of factors, with higher raw material prices and shipping rates at the forefront. U.S. spot cotton prices averaged $1.23 per pound for the week ended Feb. 3–the highest weekly average since July 7, 2011, when the average was $126. The weekly average was up from $1.18 the prior week and from 77.40 cents a year earlier.
The Producer Price Index (PPI) for synthetic fibers dipped a seasonally adjusted 0.3 percent in December, but was 23.2 percent from a year earlier. The PPI for processed yarns and threads rose 0.4 percent for the month and jumped 28.8 percent over the year, while prices for finished fabrics were up 0.8 percent in the month and increased 14.2 percent from December 2020.
In shipping, Drewry’s composite World Container Index (WCI) dipped 0.2 percent for the week ended Thursday to $9,359.10 per 40-foot container or equivalent unit (FEU), but remained 80 percent higher than a year ago. The WCI for year-to-date was $9,468 per FEU, $6,486 higher than the five-year average of $2,982 per FEU.
The overall CPI increased a seasonally adjusted 0.6 percent in January, according to BLS and over the last 12 months was up and unadjusted 7.5 percent. Increases in the indexes for food, electricity and shelter were the largest contributors to increase. The food index rose 0.9 percent in January following a 0.5 percent increase in December, as the energy index also increased 0.9 percent over the month, with an increase in the electricity index being partially offset by declines in the gasoline index and the natural gas index.
The core index, excluding food and energy, rose 0.6 percent in January, the same increase as in December. BLS said this was the seventh time in the last 10 months it has increased at least 0.5 percent. Along with the index for shelter, the indexes for household furnishings and operations, used cars and trucks, medical care and apparel were among many indexes that increased over the month.
CPI rose 7.5 percent for the year through January, the largest 12-month increase since the period ending February 1982. The core index increased 6 percent in the period, the largest 12-month change since the period ending August 1982.
The energy index, important for business operations and transportation, rose 27 percent over the last year and increased 0.9 percent in January.
The inflationary trend in the U.S. economy is expected to get worse before it gets better, according to a new report from IHS Markit.
“We’ve revised up the forecast for CPI inflation in 2022 from to 4.2 percent to 4.5 percent,” Joel Prakken, chief U.S. economist at IHS Markit, said. “However, we expect core inflation rates to subside close to the Fed’s long-run 2 percent objective by 2023, with the partial reversal of pandemic-era increases in the prices of goods.”