As fresh goods hit the stores after the holiday rush, retail apparel prices rose a seasonally adjusted 1.7% in January–the biggest monthly increase since 1990–compared to the promotional frenzy in December, the U.S. Bureau of Labor Statistics said Wednesday in its Consumer Price Index report.
The CPI for all goods increased 0.5 percent in January and over the last 12 months, the all items index rose 2.1%, indicating some inflationary trends in the economy.
“The seasonally adjusted increase in the all items index was broad-based, with increases in the indexes for gasoline, shelter, apparel, medical care and food all contributing,” the BEA reported. “The energy index rose 3 percent in January, with the increase in the gasoline index more than offsetting declines in other energy component indexes.”
The so-called core index, minus the volatile food and energy sectors, increased 0.3% percent in January, the biggest advance in a year and exceeding the 0.2 percent median estimate of economists.
“Outside of apparel, this was a lot of domestically-oriented consumer price pressure, which is a sign the economy is starting to produce more meaningful inflation,” Royce Mendes, an economist at CIBC World Markets, told Bloomberg Markets. “Overall the trend is moving in the right direction and it’s going to necessitate a tightening in monetary policy.”
[Read more about industry prices: Cotton Prices Hold Firm as New Year Takes Shape]
Ken Matheny, executive director for U.S. Economics at Macroeconomic Advisers by IHS Markit, said, “The January gain is the strongest since May 2011, implying that the effects of a weakening U.S. dollar are starting to show up in retail goods prices.”
In apparel, which accounts for about 3 percent of CPI, women’s and girls’ apparel prices jumped 2.8% for the month and were down 0.1% from January 2017. Men’s and boys’ apparel prices increased 1.8% in January from a month earlier, but decreased 0.9% year-to-year.
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In women’s wear, overall prices increased a record 3.5%, led by increases of 4.8% in suits and separates, 3.8% in dresses and 2.6% in the underwear, nightwear, sportswear and accessories category that were partially offset by a 6.35% decline in outerwear.
In men’s wear, increases of 4.2% in shirts and sweaters, and 0.9% in pants and shorts were balanced by decreases of 1.8% in furnishings and 0.4% in the suits, sport coats and outerwear group.
Footwear prices increased 0.4% in January from the previous month, but were down 2.3% compared to a year earlier. Men’s footwear prices increased 2.2% for the month and women’s prices were up 1 percent, while boys’ and girls’ prices fell 2.7%.