Consumer prices continued to decline last month as the coronavirus health crisis kept shoppers at home.
According to the Bureau of Labor Statistics, the consumer-price index, which measures the prices shoppers pay for goods in the United States, fell a seasonally adjusted 0.1% in May. It marked the third consecutive month that the figure dropped — the first time in the index’s history — following dips of 0.8% in April and 0.4% in March.
Federal and state measures, including stay-at-home orders and closures of nonessential businesses, to stem the spread of COVID-19 have led to a disruption in the demand for a wide range of products and services. Oil prices plummeted; airfares hit some of their cheapest levels; and retailers implemented steep markdowns and discounts in order to move seasonal or underperforming items.
Apparel prices sank a notable 2.3% last month, compared with April’s steep 4.7% decline: While men’s and boys’ clothing dove 2.8%, the women’s and girls’ category slid 2.9%. Footwear — which is a subset of the apparel sector — dropped 1.5%, versus April’s fall of 3.9%, with men’s and women’s shoe prices recording respective dips of 2% and 2.1%.
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On a year-over-year basis, apparel prices were down 7.9% in May — the largest decrease in the sector since December 1932 during the Great Depression.
As of this month, all 50 states in the country have begun to ease restrictions on businesses and social activities. However, economic activity is still well below pre-pandemic levels. Many Americans are holding onto cash over fears of another recession, particularly as employers across the board have resorted to furloughs and layoffs that have left a staggering 41 million people unemployed since mid-March. (Coronavirus-related job losses have wiped out all gains in the labor force since the Great Recession.)
Although experts anticipate an economic rebound in the second half of the year, it remains to be seen whether consumers will be able to return to their old shopping habits following months of disruption and panic-buying. An increasing number of retailers are throwing their resources behind e-commerce as brick-and-mortar closures have extended amid ongoing national unrest over the killing of George Floyd, an unarmed black man, by Minneapolis police on May 25.