Inflation continued to squeeze the already pressured consumer in September — with fashion broadly keeping pace with the overall economy.
Prices on all goods and services rose 3.7 percent from a year earlier, according to the Labor Department’s Consumer Price Index, updated on Wednesday.
Much of the overall boost came from fuel prices given the war in Iran, fallout from which pushed gasoline prices up 34.2 percent year-over-year.
Stripping away food and energy prices, which nonetheless are important to most households, the so-called core prices were still up 2.6 percent, slightly higher than the 2.5 percent forecast by economists, according to FactSet.
Fashion is running a little hotter than core prices, but not quite at the overall number.
September apparel and footwear prices were each up 3.4 percent from a year earlier. The apparel increase included a 7.8 percent jump in boys’ apparel and a 3.6 percent increase in girls’. Men’s increased 2.8 percent and women’s advanced 2.1 percent.
Fashion companies have been working hard to better hold prices, producing less in order to sell more at full price, accepting less growth for better margins.
But the battle against the temptation of price promotions is long and one that has had the industry continually losing ground.
Over the past decade apparel and footwear prices have risen 9 percent, leaving the industry far behind the overall inflation rate of 39.4 percent for the 10-year stretch.
That makes sense as gasoline and food have been on the rise and will take precedence over a much more discretionary category like fashion. But at the same time, it’s a sign that fashion has struggled to keep its hold on the consumer’s attention and dollar with so many things costing more.
Shoppers have held up remarkably well in recent years, but signals in the broader economy are decidedly mixed. Stocks are near all-time highs, but the bond market looks much shakier and consumer confidence is decidedly sour even if people do keep spending.
Gregory Daco, chief economist at EY-Parthenon, said higher energy costs could reverberate down the supply chain, hitting consumers again.
“The renewed surge in fuel prices is delivering an immediate hit to consumers’ purchasing power, while the spike in diesel prices poses a broader inflationary risk by raising transportation and distribution costs across the economy,” Daco said.
“At the same time, supply chain disruptions are pressuring goods prices while the AI capex boom continues to fuel price pressures across parts of the technology ecosystem,” he said. “The combination of these forces is likely to keep headline and core inflation elevated heading into 2027 and further pressure household purchasing power.”