Steepest drop for apparel prices in 50
years
Retail apparel prices have recorded their
steepest drops in 50 years and analysts expect the deflation in
prices to continue through the year.
Retail prices for all apparel dropped 3.2
percent year-over-year in December, the sharpest 12-month
decline since 1952, the U.S. Labor Department reported.
In the overall economy, prices declined
0.2 percent in December, but for the year they were up by 1.6
percent.
“The first thing that happens
whenever there are concerns about the economy is people stop
buying clothes,” a Labor Department analyst said. “
Then stores begin panic markdowns. If this had been a normal
year, maybe the declines in December would have been much
smaller, but the November markdowns didn’t have the
effect retailers needed.”
Last year, retailers started discounting
in summer and continued cutting prices through fall and the
holidays.
Prices for apparel have fallen for three
straight years and in six of the last eight years. This year is
unlikely to be no different with imports continuing to squeeze
prices. Notably, China coming into the World Trade Organization
over the next couple of years, the lifting of apparel and
textile quotas and a strong U.S. dollar should continue pushing
prices downward.
In the women’s apparel categories
tracked by the Labor Department, retail prices for suits and
separates fell 5.8 percent in 2002 and outerwear prices were
down 7 percent. Women’s dress prices, on the other hand,
increased 3.4 percent during the year.
Prices for underwear, nightwear,
sportswear and accessories fell 3.1 percent for the year while
girls’ apparel prices declined by 4.8 percent.
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