The US Bureau of Labor Statistics’ (BLS) Consumer Price Index (CPI) for September reveals apparel’s annual inflation fell to -0.3% from 0.2% on a seasonally adjusted basis, and it fell to 2.2% from 5.5% on an unadjusted basis.
Meanwhile, the Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4% on a seasonally adjusted basis after rising 0.1% in August. Over the last 12 months, the all items index increased 8.2% before seasonal adjustment with increases in shelter, food and medical care indexes being the largest of many contributors to the monthly seasonally adjusted all items increase.
Oliver Chapman from supply chain company OCI, however hints that apparel’s decline might be indicative of an upcoming trend. He says: “With US core inflation hitting a 40-year high, the latest data is gloomy indeed, but there are reasons to expect US inflation to fall later in 2022 and quite sharply.
It takes time for the supply chain to adjust to one-off shocks, but there are indications this is happening. Lumber, oil, gas, copper, iron and DRAM are among the commodities to see sharp falls in recent weeks. In addition, shipping and used car costs have also fallen significantly. Providing these falls don’t reverse, there should be a significant knock-on effect down the line, helping to reduce core inflation sharply.”
He continues: “Unfortunately, supply-side adjustments are not the only reason to expect inflation to fall next year. Rising interest rates at a time of high private-sector debts will probably lead to a contraction in demand. This contraction will help reduce inflation but may create a recession in the process.”
The index for all items less food and energy rose 0.6% in September, as it did in August. The indexes for shelter, medical care, motor vehicle insurance, new vehicles, household furnishings and operations, and education were among those that increased over the month.
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The apparel, used cars and trucks and communication indexes all reported a decline.
More specifically, mens and boys’ apparel saw a decline of -1.3%, from 0.0% the month prior, women and girls’ apparel saw a decline of -0.1% from 0.8% a month prior. Footwear on the other hand, remained constant in September and August at -0.5%