According to US media reports on the 17th, falling prices for decades have caused American consumers to spend less on an important part of their household budgets, which is clothing. But those days may be gone forever.
Consumer prices for clothing rose 0.6 percent in 2013, according to a U.S. government report released this week. Although the increase is small, it is the third consecutive year that clothing prices have increased. In the 13 years before 2011, clothing prices increased in only two years.
The main reason for the long-term decline in clothing prices is that China has gradually become the world’s largest exporter, and an era of imported clothing at low prices has also formed. This is a boon to consumers’ living standards, as they can save more money to buy other things.
In 1987, clothing accounted for 5.4% of all personal consumption expenditures in the United States. By 2009, that number had dropped to 3.1%. It rebounded slightly in 2012, reaching 3.2%. Figures for 2013 are not yet available.
Events in 2010, when bad weather reduced output in China, India and the United States, the world’s three largest cotton producers, may have marked the end of an era of cheaply imported clothing. India directly banned exports, and cotton prices began to rise. In the first half of 2011, cotton prices briefly rose to US$2.19 per pound (approximately RMB 13.25), which was less than 70 cents at the beginning of 2010.
At the end of 2011, cotton prices returned to below $1, but the previous wave of increases had pushed the U.S. apparel inflation rate to 4.6% in 2011, the highest record since 1990 and much higher than The overall inflation rate for the year was 3%. This is the first time since 1991 that clothing prices have risen faster than overall inflation.
In 2012, the clothing inflation rate dropped to 1.8%, slightly higher than the overall inflation rate; in 2013, it was 0.6%, far lower than the overall inflation rate of 1.5%.
This week’s report showed that last year’s clothing prices fell in December, as happens every year during the Christmas sales season. But the 2.3% monthly decline was the smallest December decline in eight years — perhaps a sign that apparel retailers are more successful than in the past in avoiding deep discounts on merchandise. After adjusting for seasonal factors, data from the U.S. Bureau of Labor Statistics showed that clothing prices increased 0.9% in December from November.
Over the past 27 years since the end of 1986, U.S. apparel prices have increased only 17%. Children’s clothing has been the category with the weakest growth, possibly because parent buyers are particularly price-sensitive in this category. Data show that the price of boys’ clothing increased by only 1%, while the price of girls’ clothing fell by 6% during the same period. Men’s clothing prices rose faster than women’s clothing, but footwear prices increased by 29% during the same period, higher than all other categories of clothing.