Women’s apparel prices declined 0.5 percent in December, while men’s apparel prices were down 0.6 percent.

However, on a year-over-year basis, prices were up. All retail apparel prices were 4.6 percent higher last month compared with December 2010, as women’s prices increased 4 percent and men’s prices gained 5.6 percent in the period.

The overall Consumer Price Index was flat for the second consecutive month, but prices were 3 percent higher than December 2010. Core retail prices, excluding volatile food and energy prices, rose 0.1 percent in December compared to November.

“Retailers are finding that it has been very difficult to increase prices when consumer demand is relatively weak,” said Chris G. Christopher Jr., senior principal economist at IHS Global Insight. “During the holiday season, many chain store retailers offered heavy discounts in order to get shoppers to open their wallets.”

Christopher said he does not expect retail prices to grow at the same pace this year as they did in 2011.

“The easing of prices and the recent improvements on the jobs front are helping boost consumer confidence and spending,” Christopher said. “Looking ahead, consumer prices should increase this year at roughly half the pace of last year.”

Jeet Dutta, senior economist at Moody’s Analytics, said the holiday season started out strong for retailers, but “faded quite a bit” in December, which forced heaving discounting.

He noted that it was only the second report this year where apparel prices were in the negative. The last negative reading was in April.

“I would say that since the fourth quarter of 2011, we have seen somewhat of a moderation in [inflation in apparel prices],” Dhutta said. “In addition to the discounting that took place during the holiday shopping season, the December drop was also part of a moderating trend that began in late 2011 in cotton prices, which had a pretty sharp drop.”

Cotton prices have stayed below $1 a pound for several months after reaching an historic high in March of more than $2 a pound.

“It is simply hard for retailers to maintain any kind of sustained pricing power in this environment, where consumers are buying but they are still in that mind-set that was bred in the recession of looking for discounts and being very cost conscious,” Dutta added. “Facing that kind of consumer sentiment, it is hard for retailers to hold onto pricing power for too long.”