STORES SEE CHALLENGES AHEAD; RETAILERS TURN TO PRIVATE LABEL, COST CUTTING IN RESPONSE TO LACKLUSTER CONSUMER SPENDING ON APPAREL AND SHOES.(retail apparel prices )

Daily News Record, August, 2006 by Ellis, Kristi; Zaczkiewicz, Arthur

Byline: ARTHUR ZACZKIEWICZ, KRISTI ELLIS

NEW YORK - Although consumer spending on gas and oil has skyrocketed, analysts and economists breathed a sigh of relief after recent government data showed that the core inflation rate has slowed.

The data, which includes retail apparel prices, will likely result in the Federal Reserve Board not raising interest rates.

The data bodes well for the state of consumer spending. But there remain challenges ahead. Personal consumption expenditure growth on apparel and shoes, which includes men's wear, was flat from the first quarter to the second quarter, and it was far outpaced, on a year-over-year basis, by spending on fuel and home goods.

For companies selling apparel and shoes, this trend...

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