US clothing purchases continued to outperform broader consumer spending in May, although the pace of growth moderated compared with earlier months in 2025. The latest market data presents a mixed outlook for cotton apparel exporters, sourcing professionals, and global suppliers monitoring demand trends.
According to the July 2026 Executive Cotton Update from Cotton Incorporated, US apparel demand increased by 0.6% month-on-month in May after experiencing declines in March and April. Compared with the same month last year, apparel spending rose 3.5%, indicating that consumer interest in clothing remained stronger than overall retail spending.
In contrast, total consumer expenditure grew only 0.2% during May and recorded a 2.1% year-on-year increase. Clothing prices also continued to climb, rising 0.2% from April and 4.8% from a year earlier—the fastest annual increase since the post-pandemic period. This marks a notable shift for a sector where apparel prices have traditionally remained stable or declined over time.
The report also highlighted improving global trade conditions following a memorandum of understanding signed between the United States and Iran in mid-June, which helped restore smoother cargo movement through the Strait of Hormuz. The development contributed to lower energy costs, with Brent crude falling about 16% from early June levels to around US$70 per barrel. Average US gasoline prices also declined by roughly 16%, easing transportation expenses.
Despite lower fuel costs, inflation remained elevated at 4.2%, while wage growth stood at approximately 3.5%, continuing to pressure household budgets.
For apparel manufacturers and sourcing teams, US apparel demand remains an important indicator. The report noted that the average cost of cotton-dominant apparel reached US$3.68 per square metre equivalent in May, down 3.5% from a year earlier but still 6.8% above pre-pandemic 2019 levels.
