After steadily rising over the past decade, apparel prices now appear to have plateaued. Between 2012 and 2014, CPI values approached 123.0 following the 2010-11 fibre price spike, but the recent stagnation suggests a shift in consumer demand or competitive market forces.
Import volumes have surged in recent months, with the weight of apparel shipments into the US rising by at least 15 per cent year-over-year since October. In January, apparel imports skyrocketed by 26 per cent compared to the same period last year, Cotton Incorporated said in its Executive Cotton Update – US Macroeconomic Indicators & the Cotton Supply Chain, March 2025.
US CPI for garments fell 1.6 per cent in January but remained 0.4 per cent higher year-over-year, indicating price stability.
Apparel imports surged 26 per cent year-over-year, driven by inventory restocking and tariff concerns.
Consumer confidence dropped sharply, while garment spending rose.
Tariff hikes on Chinese, Mexican, and Canadian imports add uncertainty.
Industry analysts suggest multiple factors behind the spike, including retailers replenishing inventory after earlier drawdowns, pre-emptive stocking ahead of tariff increases, and potential policy changes on de minimis shipments.
Economic uncertainty looms over the retail sector, as the Conference Board’s Consumer Confidence Index dropped sharply by 7.0 points in February to 98.3. This marks the third consecutive monthly decline and the steepest fall since August 2021, though the index remains within the 95-115 range seen since 2021.
Consumer spending in January also reflected a slowdown, declining 0.5 per cent month-over-month – the first drop since January 2024. However, spending on garments bucked the trend, rising 1.1 per cent month-over-month and 1.5 per cent year-over-year, indicating continued interest in clothing despite broader economic caution.
The trade environment remains volatile, with recent tariff increases on key US trading partners adding to the uncertainty. A 10 per cent tariff hike on Chinese imports took effect on February 4, following a proposal in January that initially included Mexico and Canada but was delayed.
A second wave of tariffs was implemented on March 4, imposing 25 per cent duties on Mexican and Canadian imports—though several product categories were excluded after implementation. Meanwhile, an additional 10 per cent tariff hike on Chinese goods brought the total increase for 2025 to 20 per cent.
China and Canada have retaliated against these measures, but Mexico has yet to announce any counteractions. The prolonged cycle of tariff negotiations continues to cast doubt on economic forecasts, with inflationary risks that could influence consumer spending and Federal Reserve policy according to Executive Cotton Update.
Despite economic turbulence, the US labour market remains resilient. The economy added 151,000 jobs in February, in line with recent averages, though federal government employment saw a slight decline. The unemployment rate edged up from 4.0 per cent to 4.1 per cent but remains within the tight 3.9-4.2 per cent range observed since early 2024.
Wage growth has also outpaced inflation, with average hourly earnings rising 4.1 per cent year-over-year in February. Although this is lower than the post-stimulus peak of 7.0 per cent in February 2022, it has remained consistently above inflation, which stood at 3.0 per cent year-over-year in January.
Fibre2Fashion News Desk (KD)