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Apparel’s Upward Price Momentum Spills Over Into July

Although the COVID-19 pandemic rocked U.S. apparel prices from March through May, prices have now trended up for the second-straight month, according to the Bureau of Labor Statistics (BLS) in its Consumer Price Index (CPI), which measures the change in prices paid by consumers for goods and services.

On a month-over-month seasonally adjusted basis, apparel prices increased 1.1 percent in July, after jumping 1.7 percent in June. On a year-over-year unadjusted basis, total apparel prices are still down 6.5 percent from July 2019.

Apparel’s 1.1 percent price increase was buoyed by a 5.8 percent seasonally adjusted month-over-month price boost from boys’ apparel. Men’s adjusted apparel prices dropped 0.5 percent in July, a dip from June’s 2.4 percent price increase. This is largely due to decreases in the cost of men’s shirts and sweaters (1.9 percent) and men’s underwear, nightwear, swimwear, and accessories (0.9 percent).

Unlike the men’s category, women’s and girls’ apparel saw an uptick for the second month in a row, with a seasonally adjusted 1.3 percent price jump. Women’s apparel prices accounted for most of the increase, rising 1.7 percent and backed by major jumps in outerwear (4.6 percent) and dresses (4.1 percent). Girls’ apparel prices declined 0.5 percent, however.

Folded into the overall apparel category, footwear also saw seasonally adjusted prices increase for the second month in a row to 1.2 percent in July. Women’s footwear prices showed the largest increase at 2.6 percent, while men’s jumped 1.4 percent. Boys’ and girls’ footwear still saw a 1.2 percent price drop. Unadjusted footwear prices remain down 3.3 percent compared to July 2019.

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One standout category that has seen prices plummet on a year-over-year unadjusted basis is women’s dresses, which have dropped 23.1 percent in average price, even after the most recent 4.1 percent month-over-month increase. This represents the third-largest drop across all categories measured by the BLS, with the only larger price decreases coming from fuel oil (27.2 percent) and airline fares (23.7 percent).

Infants’ and toddlers’ apparel saw a slight 0.8 percent month-over-month price hike, yet remains 3.4 percent down compared to July 2019.

Across all categories, overall CPI increased 0.6 percent in July on a seasonally adjusted basis, just like it did in June, according to the BLS. Over the past 12 months, the index was up an unadjusted 1 percent.

For analyzing short-term price trends in the economy, the BLS notes that seasonally adjusted changes are usually preferred since they eliminate the effect of changes that normally occur at the same time and in about the same magnitude every year—such as price movements resulting from weather events, production cycles, model changeovers, holidays and sales.

Unadjusted data serves more of primary interest to consumers concerned about the prices they actually pay.

The core index, which excludes the volatile food and energy sectors, rose 0.6 percent in July, a jump from the 0.2 increase June, which was the core’s first monthly increase since February. On a 12-month unadjusted basis, the core index saw prices jump 1.6 percent.

In addition to apparel, the indexes for shelter (0.2 percent) and medical care (0.5 percent) also increased in July.

The energy index, which remains important for the supply chain and logistics side of the apparel industry due to tracking gasoline, fuel oil, electricity and utility gas service, continues to increase in unadjusted price at a rate of 2.5 percent in July after rising 5.1 percent in June. The increase was predominantly a result of the gasoline index, which rose 5.6 percent in July following a 12.3 percent increase in June. The electricity index increased 0.3 percent in July, following a decline of 0.3 percent in June. The index for natural gas, in contrast, fell 1 percent over the month.