WASHINGTON — Retailers were buoyed by the introduction of fresh spring merchandise in May, and prices appeared to hold up after merchants cleared out excess inventory.
Retail prices rose a seasonally adjusted 0.8 percent in May, driven by gains in the women’s and men’s categories, the U.S. Labor Department’s Consumer Price Index showed Thursday.
Women’s apparel prices increased a seasonally adjusted 0.4 percent last month, while men’s apparel prices were up 1.7 percent. Girls’ apparel prices showed the strongest increase, rising 2.2 percent, while boys’ apparel prices fell 0.8 percent.
“I think spring fashion is selling well and selling at a good price,” said Chris G. Christopher Jr., director of consumer economics at IHS Global Insight. “Spring fashion was holding up, and clothing stores are making a good profit for the month of May.”
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He said retailers have sold off excess inventory, as evidenced by declines in prices and heavy discounting the past two months.
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“They went into this new fashion cycle, and demand is relatively OK,” he said. “They were taking hits for months, on the price front, to get rid of that inventory, and with the spring fashion they can charge higher prices.”
But Christopher warned that he wouldn’t read too much into the increase in apparel prices, because they were in negative territory in April and March, and March was “pretty brutal,” he said, pointing to a 1.1 percent drop in apparel prices that month.
The overall CPI increased 0.2 percent, led by a jump in energy prices, but fell below economists’ expectations. The core index that excludes volatile food and energy prices increased 0.2 percent.
In the women’s category, the largest gain was in outerwear prices, which were up 3.4 percent, followed by dress prices, which rose 1.1 percent. Prices in the combined underwear, nightwear, sportswear and accessories group rose 0.8 percent, while prices for suits and separates fell 0.1 percent.
The men’s wear price increases were led by the combined suits, sport coats and outerwear category and the furnishings category, each posting a 2.9 percent increase. Prices for pants and shorts gained 1.3 percent, while prices for shirts and sweaters rose 0.3 percent.
Christopher said the increase in the overall CPI index was led by a 1.2 percent increase in energy prices in May, driven primarily by gasoline-price rises. On a positive note for consumers, food prices fell 0.2 percent and “core” goods prices were also down, he said.
“The recent weakness in food-at-home prices is helping many low-income households deal with rising pump prices,” Christopher said. “Going out to eat has picked up steam over the past couple of years — restaurant prices have been clocking a 0.2 percent increase for several months.”