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Retail Apparel Prices See Largest Monthly Decline in 63 Years

As the coronavirus pandemic caused widespread disruption across discretionary American retail, the bottom fell out of apparel and footwear prices in April.

The price of all apparel sold at retail last month fell a seasonally adjusted 4.7 percent from March, with declines in all sectors, according to the Consumer Price Index (CPI) released Tuesday by the Bureau of Labor Statistics (BLS). This was the largest monthly decline since the CPI began collecting this data in 1957.

Compared to April 2019, apparel prices were down an unadjusted 5.7 percent, as tens of thousands of stores closed over government mandates and those that were open and direct-to-consumer merchants resorted to significant markdowns and discounts.

Women’s apparel prices tumbled 6.3 percent for the month. The price of dresses–normally a key spring item for special occasions like proms, graduations and weddings, the majority of which were cancelled or postponed–were down 9.6 percent. Outerwear prices fell 8.3 percent month to month, while prices in the underwear, nightwear, swimwear and accessories group declined 5.8 percent, and suits and separates decreased 5.1 percent.

Men’s wear prices dropped 4.7 percent in April, led by an 11.3 percent decline in suits, sport coats and outerwear, as working from home became the norm, rendering the concept of “dressing up” generally unnecessary for the time being. Men’s pants and shorts cost 4.7 percent less at retail last month, and prices on shirts and sweaters were down 4.6 percent, while the underwear, nightwear, swimwear and accessories group saw prices fall 2 percent.

Boys’ apparel prices declined 5.5 percent in the month and girls’ clothing cost 1.3 percent less. Prices for infants’ and toddlers’ apparel decreased 3.7 percent.

Footwear prices dropped 3.9 percent in the month. Women’s footwear prices stepped down 5.2 percent, while men’s were off 1.1 percent and boys’ and girls’ fell 4 percent.

The overall CPI declined 0.8 percent in April on a seasonally adjusted basis, the largest monthly decline since December 2008 during the Great Recession, BLS reported. A 20.6 percent decline in the gasoline index was the largest contributor to the monthly decrease, but the indexes for apparel, motor vehicle insurance, airline fares and lodging away from home all fell sharply, as well, BLS noted.

In contrast, food indexes rose in April, with the index for food at home posting its largest monthly increase since February 1974, as stay-at-home orders and social distancing saw massive restaurant closures.

The core index, excluding volatile food and energy sectors, fell 0.4 percent in April, the largest monthly decline since 1957. The indexes for rent, medical care and household furnishings and operations were the only sectors with price increases in April.

The overall CPI increased 0.3 percent for the year ending in April, the smallest 12-month increase since October 2015. The core index increased 1.4 percent over the past 12 months, its smallest gain since April 2011. The energy index fell 17.7 percent over the past year. In contrast, the food index rose 3.5 percent over the past year, its largest 12-month increase since February 2012.

BLS noted that data collection by personal visit for the CPI program has been suspended since March 16. When possible, data normally collected by personal visit were collected either online or by phone.

In addition, data collection in April was affected by the temporary closing or limited operations of certain types of establishments. These factors resulted in an increase in the number of prices considered temporarily unavailable and imputed. While the CPI program attempted to collect as much data as possible, many indexes are based on smaller amounts of collected prices than usual, and a small number of indexes that are normally published were not published this month.

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