Even as manufacturers grapple with high raw materials prices, retail apparel prices fell 0.3% in July from a month earlier, the Bureau of Labor Statistics reported Friday in its Consumer Price Index (CPI).
Women’s apparel prices declined 2 percent, while the cost of men’s wear at retail rose 1.7%. Girl’s clothing prices dipped 0.7% in the month and the price tags for boys’ apparel declined 3 percent.
In women’s, suits and separates prices dropped 2.9% and outerwear prices fell 1 percent, while the broad underwear, nightwear, sportswear and accessories group saw prices rise 0.9%, and dresses cost 0.8% more at retail.
In men’s, price increases of 5.3% were notched in furnishings, 2.5% in suits, sports coats and outerwear, and 0.7% in shirts and sweaters, while pants and shorts prices dropped 2.4%.
Overall footwear retail prices were up 1.1% in July, with boys’ and girls’ increasing 4.3%, men’s rising 1.3% and women’s falling 1.6% compared to the previous month.
Textile and apparel manufacturers have been strategizing over how to pass along cost increases to retailers and ultimately consumers, but that doesn’t seem to have made its way through the supply chain yet. This came after cotton prices spiked over $1 a pound in recent months before settling down somewhat, but still inflated from a year ago, and synthetic fibers were being hit by price increases in ingredient materials.
The overall CPI increased 0.2% in July on a seasonally adjusted basis, after rising 0.1% in June, the BLS reported. The core CPI, which excludes the volatile food and energy sectors, increased 0.2% for the third consecutive month.
The energy index, which is important for business operations, fell 0.5%, as all the major component indexes declined.
“The 12-month change in the core CPI increased one-tenth to 2.4%, the highest reading in nearly a decade,” Juan Turcios, economist for Macroeconomic Advisers by IHS Markit, said. “This measure has been trending higher since November 2017, when it read 1.7%.
Increases in the indices for new vehicles, shelter and used cars and trucks contributed to the rise in the core CPI last month.
“The CPI for major appliances rose 3.5% in July, continuing a sharp rise over recent months following the imposition of tariffs on imported washing machines,” he said. “Over the last five months, the CPI for major appliances has risen 11 percent. Based on today’s report, we made no revision to our forecast for third-quarter real personal consumption expenditures growth, leaving our third quarter GDP estimate at 3.2%.”