US apparel spending up 9% despite weak confidence, govt shutdown

Consumer spending rose 0.4 per cent month-on-month in August, matching July’s growth and exceeding June’s 0.3 per cent. Year-on-year, spending grew 2.7 per cent—stronger than May and June’s 2.5 per cent, but below the three per cent-plus levels common in late 2024. Garment spending climbed 1.1 per cent month-on-month, extending gains of 1.2 per cent in May, 0.8 per cent in June, and 1.0 per cent in July. On an annual basis, apparel spending soared 9.0 per cent in August—the highest since the post-pandemic stimulus period, far above the long-term two per cent average, Cotton Incorporated said in its Executive Cotton Update - US Macroeconomic Indicators & the Cotton Supply Chain, October 2025.

Meanwhile, the Conference Board’s Consumer Confidence Index slipped 3.6 points to 94.2 in September—its lowest since April’s 85.7—marking only the second time in nearly four years that values fell outside the 95–115 range.

The US Federal government shutdown on October 1 has delayed major data releases including the Employment Situation report, trade statistics (covering apparel import prices and volumes), and agricultural supply-demand updates. The postponed jobs report, originally due on October 3, has increased market reliance on private data.

ADP’s September figures showed a 32,000-job contraction in private-sector employment, following months of weaker government data. Between June and August, payroll growth averaged just 29,000 jobs per month—down sharply from 2024’s average of 168,000. The missing September government data would have provided critical clarity on labour market trends.

Despite recent softening, unemployment remains historically low at 4.3 per cent, below five per cent since late 2016 (excluding pandemic volatility). Wage growth slowed but stayed above inflation, with average wages up 3.9 per cent year-on-year in August versus a 2.9 per cent CPI increase. This wage edge continues to support consumer spending but raises questions about how long households can sustain demand amid weaker confidence and fiscal uncertainty.

ALCHEMPro News Desk (KD)