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Apparel Prices Fall for First Time in Two Years

Apparel prices fell in April for the first time since March 2011, according to Consumer Price Index Data released yesterday by the U.S. Department of Commerce.

Most of the decline was due to a plunge in childrenswear prices. Menswear prices bucked the overall apparel trend, as younger fashion-conscious men snapped up premium-priced dressy sportswear in bright colors and tailored pieces in newer slim silhouettes.

Overall inflation has been trending lower. The April consumer price index rose by only 1.1%, its smallest monthly increase in nine months. Much of inflation’s easing was brought about by declines in gas and grocery prices. The core rate, which excludes food and energy, rose by 1.7%.

While low overall inflation is good for economic growth, downward pressure on apparel prices has been tough on retailers. The pressure is coming from the all-powerful consumer, who is increasingly cautious with his or her hard-earned money and demanding lower prices and increased value at every turn. In most cases, unless the product and shopping experience are sufficiently unique and compelling, consumers use the lower prices to simply spend less. Consumer spending on apparel has been declining steadily over the past year.

Apparel and footwear prices rose by a mere .3% compared to April of 2012, well below the overall inflation rate, and their lowest monthly increase in two years.

Shoes continue to command stronger pricing than apparel. Footwear prices jumped 3.2% in April compared to a year ago, its lowest increase in eight months but still well above that of clothing. Women’s footwear enjoyed the biggest increase, at up 3.4%.

Apparel makers, who have all but given up trying to raise prices in the highly competitive retail environment, were dealt the biggest blow, as the apparel price index fell by .4%, its first decline in over two years.

Prices for infants’ and children’s apparel fell by an average of 2.2%, with girl’s apparel prices sliding 7.5%. Womenswear prices rose were flat to slightly down. Menswear prices rose by an average of 3.3%, their biggest increase in seven months.

Since the government’s data is from item-level prices, it might even be optimistic. CPI data doesn’t take into account coupons that discount entire transactions or rebates on credit cards, all of which further erode the ultimate price paid for a given item.

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