Air Inflation

A brief post to quench the conciseness thirst of The Fashionomist's dear readers, who may find her ramblings a bit daunting...

Remember the 1980s?  Probably not, as The Fashionomist's generation was still waddling around in diapers and trying to figure out why mommy insisted on mashed peas.  But back then, our mommies were worrying about more than mashed peas and diaper spillage - inflation was at an all time high, up to 13%.  Inflation isn't as bad now - rates are a measly 2.1% over the past year.  However, take into account our frozen wages (compared to the 1980s, where wages were relatively keeping up with inflation) and, dear reader, you have a painful reality:  there sure is some bang going on for every buck, and not the good kind.

In fact, dear reader, wages fell .7% to be less than $50,000 for the average household.  What does this mean for a fashionomist?  Those luxury goods you are drooling over are costing quite a bit more than one expects.  And in a surprisingly curious turn of events, the media is focusing on the increase in the cost of Nikes as a reflection of the difficulty the consumer will have in the latest inflation crisis.

Apparel is seeing huge jumps in prices due to rising costs (companies are facing rising costs just like us normal people).  Because materials and freight costs are ballooning, Nike plans on raising prices on its newest line of shoes this upcoming spring.  Goldman Sachs (http://www.benzinga.com/analyst-ratings/analyst-color/11/03/938763/goldman-sachs-comments-on-nikes-risks-following-earnings-) reports that Nike may simply not have seen the price hike coming:  the footwear giant set prices long ago (as many companies do) and did not figure climbing prices into its costs, putting Nike in danger of taking a "margin hit."

Nike isn't the only apparel company to announce increases in prices - Wrangler Jeans maker VF Corp and JC Penney's have announced similar increases in price.  And increasing gas prices are not helping matters - retailers are highly concerned that shopping will fall if gas prices continue to creep upwards and consumers decide that the very tantalizing substitute option of shopping online (or perhaps saving precious moolah and not shopping at all) is preferable.

In any case, the Nike Index is not looking too promising in the coming months, at least not on this planet.

Source:  http://www.chicagotribune.com/sns-ap-us-inflation-economy,0,1843250.story

*The Fashionomist*