US apparel prices ease as spending stays resilient amid Fed rate cuts

Import volumes also showed limited disruption. On a weight basis, apparel imports between May and September declined 3.6 per cent year on year, while cotton apparel imports were broadly stable, edging up 0.3 per cent, indicating relatively steady underlying demand.

Consumer sentiment, however, weakened. The Conference Board Consumer Confidence Index fell 6.8 points in November to 88.7, well below the pre-2022 range and comparable to levels seen during the pandemic period of 2020–2021, according to the Cotton Incorporated Executive Cotton Update - US Macroeconomic Indicators & the Cotton Supply Chain - December 2025.

Despite this, consumer spending remained resilient. Bureau of Economic Analysis data showed overall consumer spending was flat month on month in September but increased 2.1 per cent year on year. Clothing expenditure fell 1.2 per cent during the month but rose sharply by 7.2 per cent on an annual basis. Since January, apparel spending has averaged 6.4 per cent year-on-year growth, well above the long-term average of around 2 per cent.

On December 10, 2025, the Federal Reserve cut interest rates by 25 basis points, bringing total reductions since August 2024 to 1.75 percentage points. Fed chair Jerome Powell highlighted persistent upside risks to inflation alongside downside risks to employment, calling the policy environment “challenging”.

Labour market indicators pointed to a slowdown. The unemployment rate rose to 4.6 per cent in November from 4.4 per cent in September, while average wage growth eased to 3.5 per cent year on year, its lowest level since 2021. Job gains averaged just 37,000 per month since May, sharply lower than the 150,000 average recorded in the previous year.

Retail activity remained strong during the holiday period. The National Retail Federation reported a record 202.9 million shoppers over the Thanksgiving period, while Adobe Analytics said Cyber Monday sales rose 7.1 per cent year on year, setting a new high.

ALCHEMPro News Desk (KD)