WASHINGTON — Wholesale prices on U.S.-made women’s and girls’ apparel fell a seasonally adjusted 0.5 percent in November and were 0.5 percent lower than a year earlier.
However, the Labor Department’s monthly Producer Price Index, released Tuesday, also revealed that prices on all domestically made goods were rising after several months of declines. The overall PPI jumped 2 percent in November after falling 1.6 percent in October, driven in large part by higher energy prices, which went up 6.1 percent. It was the largest single-month increase in more than 32 years.
Stripping away volatile food and energy prices, so-called core prices increased 1.3 percent in November — the most since 1980 — after falling 0.9 percent in October.
Brian Bethune, U.S. economist with Global Insight, attributed the rise in both the overall index and core rate to the change in prices associated with the introduction of the 2007 passenger car and light truck models.
“When you move from 2006 models to 2007 models with passenger cars and light trucks, there is typically a big bump in prices,” he said. “That’s basically what we’re seeing here.”
The price swing may be more “exaggerated” this year because car dealers initiated heavy discounting on 2006 cars and trucks to keep inventories down, Bethune said.
“They are trying to move to more market-based pricing now and less cash on the hood,” he added. “That’s what I think caused the big distortions from month to month.”
Economists generally expect the Federal Reserve Board’s Open Market Committee, which has raised concerns about inflation, to keep the benchmark federal funds interest rate at 5.25 percent when it meets in March.
“Over the last year, producer prices, including food and energy, have risen only 0.9 percent, and consumer price inflation is likely to moderate through the early months of 2007,” Peter Morici, professor at the University of Maryland’s Robert H. Smith School of Business, wrote in a report.
“The Federal Reserve will want to see several more months of data before changing interest rate policy and no change is likely at least until the March 27 to 28 meeting,” Morici said.
Related Articles
You May Also Like
Domestically produced apparel accounts for less than 10 percent of goods sold at retail and competition from low-cost imports has for the most part kept a lid on prices.
Within the women’s and girls’ category in November, woven shirts prices increased 2 percent against a year earlier, and dress prices fell 2.4 percent, women’s outerwear and girls’ sweaters prices declined 3.3 percent and underwear prices dipped 2.6 percent.
In the textiles arena, prices on synthetic fibers rose 0.3 percent in November and against a year earlier. Prices on yarns fell 0.5 percent last month but rose 1.7 percent against a year ago. Prices for greige fabrics were even in November and increased 3.1 percent against November 2005.