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Why Retail Apparel Prices Fell Again in March

Retail apparel prices declined a seasonally adjusted 0.3 percent in March, following a 0.7 percent decline the previous month, as a drop in the cost of women’s and girls’ clothing outweighed increases in men’s and boys’, the U.S. Bureau of Labor Statistics (BLS) revealed Tuesday in its Consumer Price Index (CPI).

Women’s wear prices were down 2.1 percent last month compared to February, with wide disparities by category seemingly based on demand and seasonality. Suits and separates prices fell 4.1 percent for the month and outerwear decline 1.5 percent, while prices for dresses were up 2.4 percent and the cost of goods in the underwear, nightwear, swimwear and accessories group was up 1 percent.

Retail apparel prices for men’s wear increased 1.1 percent in March, with increases in every category except suits, sport coats and outerwear, where prices fell 1.7 percent. Prices were up 2.6 percent in pants and shorts, 1.7 percent for shirts and sweaters, and 0.8 percent for the underwear, nightwear, swimwear and accessories group.

Boys’ apparel prices jumped 6.8 percent, but girls’ clothing cost 5.6 percent less. Prices for infants’ and toddlers’ apparel fell 5.6 percent.

Prices on apparel are also affected by raw materials cost further down the supply chain.

Spot prices for U.S. cotton averaged 74.97 cents per pound for the week ended April 8, down from 75.46 cents the prior week, but up from near historic lows of 47.85 cents a year earlier, the Department of Agriculture reported. The synthetic fiber Producer Price Index rose 2.2 percent in March from the prior month, according to BLS.

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The overall CPI increased 0.6 percent in March on a seasonally adjusted basis after rising 0.4 percent in February. The March increase was the largest rise since a 0.6 percent increase in August 2012, BLS said. Over the past 12 months, the CPI was up an unadjusted 2.6 percent.

The gasoline index continued to increase, rising 9.1 percent in March and accounting for nearly half of the overall increase. The natural gas index also rose, contributing to a 5 percent rise in the energy index, important for business operations and discretionary consumer income, over the prior month.

The core index, minus food and energy. rose 0.3 percent in March. The shelter index increased in March, as did the motor vehicle insurance index, the recreation index, and the household furnishings and operations index. Indexes that decreased over the month included apparel and education.

The overall CPI was up 2.6 percent for the 12 months ending March, a much larger increase than the 1.7 percent reported for the period ending in February, BLS noted. The core index rose 1.6 percent over the past 12 months, after increasing 1.3 percent over the previous period.