WASHINGTON — Retail apparel prices rose a seasonally adjusted 0.6 percent in January, driven primarily by increases in boys’ and girls’ apparel, as well as strength in outerwear prices, the U.S. Labor Department’s Consumer Price Index showed Friday.
The girls’ apparel category showed the most strength, as prices increased 3.7 percent. Boys’ apparel prices were up 1.4 percent. Prices for women’s apparel were flat in January, while prices for men’s apparel dropped 0.8 percent.
Ryan Sweet, director of real-time economics at Moody’s Analytics, said colder weather in January also likely boosted prices in some categories.
“Some of it in January might have been weather related for girls’ and women’s prices,” Sweet said. “We had an unseasonably warm November and December, and temperatures began to normalize again last month.”
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Prices for women’s outerwear jumped 7.2 percent in January compared to December, which saw heavy discounting given the warm weather. Prices for the combined men’s suits, sport coats and outerwear category increased 1.4 percent.
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“Retailers, even apparel retailers, have limited pricing power,” Sweet said. “The consumer is still very price sensitive and retailers recognize that and are hesitant to increase prices because it will come at the expense of sales.”
In the women’s category, the price gains in outerwear led the category, followed by a 1.5 percent increase in prices for dresses. Prices for the combined underwear, sleepwear, sportswear and accessories category fell 1.6 percent, while prices for suits and separates declined 1.2 percent.
Men’s wear price declines were led by furnishings, which fell 3.3 percent, and shirts and sweaters, which dropped 2.9 percent, while prices for pants and shorts rose 0.2 percent.
In the overall economy, retail prices were flat, which was stronger than economists’ expectations. Core prices, excluding volatile food and energy prices, rose 0.3 percent, the largest gain since August 2011, according to Sweet.
Chris G. Christopher Jr., director of consumer economics at IHS Global Insight, said apparel prices “finally made a comeback after hanging in negative territory for four consecutive months.”
“The headline CPI was flat in January, with good news on food prices [flat] and energy prices [down] offsetting an increase in the core inflation rate,” Christopher said.
Christopher said the “so-called pump price dividend” from lower gas prices is motivating people to go to restaurants, while stronger employment numbers have led to more people eating out.
“Overall price pressures remain muted and the February result will most likely reverse some upside quirks in the core consumer price categories,” Christopher predicted. “February will have an even larger gasoline price drop to push the monthly CPI back into the red.”