US apparel prices stay steady as shoppers keep spending
The latest US inflation and retail data point to a clothing market that remains largely balanced, even as economic signals send mixed messages.
Consumer Price Index figures for September showed garment prices rising 0.7 per cent from the previous month, while average retail apparel prices were 0.3 per cent lower than a year earlier. According to Cotton Incorporated, this suggests apparel inflation is still under control, despite higher tariffs on imported goods.
Trade data supports this picture of stability. Between May and September, total apparel imports fell 3.6 per cent year on year on a weight basis. Cotton apparel imports, though, edged up by 0.3 per cent, pointing to steady demand rather than a sharp pullback by consumers or retailers.
Consumer confidence told a less positive story. The Conference Board Consumer Confidence Index dropped 6.8 points in November to 88.7. That level sits well below the range seen before 2022 and is similar to readings during the pandemic years of 2020 and 2021, based on Cotton Incorporated’s December 2025 Executive Cotton Update.
Spending patterns have not fully reflected this drop in sentiment. Data from the Bureau of Economic Analysis showed overall consumer spending was flat month on month in September, yet up 2.1 per cent compared with last year. Clothing spending dipped 1.2 per cent during the month but climbed 7.2 per cent year on year. Since January, apparel spending has averaged 6.4 per cent annual growth, far above the long-term norm of about 2 per cent.
Monetary policy also shifted during this period. On December 10, 2025, the Federal Reserve lowered interest rates by 25 basis points. This brought total rate cuts since August 2024 to 1.75 percentage points. Fed Chair Jerome Powell described the current policy setting as challenging, citing ongoing upside risks to inflation alongside growing concerns around employment.
Labour market data showed signs of cooling. The unemployment rate rose to 4.6 per cent in November, up from 4.4 per cent in September. Average wage growth slowed to 3.5 per cent year on year, the weakest pace since 2021. Job creation also lost momentum, averaging 37,000 new jobs per month since May, compared with about 150,000 per month over the previous year.
Retail performance during the holiday season remained a bright spot. The National Retail Federation reported a record 202.9 million shoppers over the Thanksgiving period. Adobe Analytics added that Cyber Monday sales increased 7.1 per cent year on year, reaching a new high.
Taken together, the data show a US apparel market holding its ground. Prices remain stable, imports show limited disruption, and shoppers continue to spend, even as confidence softens and the labour market slows.
