This week’s Market Mover is an entire industry, apparel stores. In the past week stock prices of many apparel stores like Gap (NYSE:GPS), Pacific Sunwear of California (NASDAQ:PSUN), Aeropostale (NYSE:ARO), and New York & Company Inc. (NYSE:NWY) have fallen by more than 5% (Chart 1). With a combination of high raw materials costs for clothing inputs like cotton and rayon still elevated and continuing weak customer demand, the apparel industry is in a vice. While prices for cotton have come down, they are still well above prices of a year ago. Americans are buying less, as their real wages (Chart 3) have begun to decline again after a brief period of growth in 2010. Reductions in real wages can directly affect retailers because consumers have less to spend and are choosier about where they spend it.
