In June, average retail prices for clothing in the U.S. saw a slight increase of 0.4% compared to the previous month, following decreases of 0.1% in April and 0.4% in May. Year-over-year, the Consumer Price Index (CPI) for apparel has declined for three months in a row, with drops of 0.5% in April, 0.7% in May, and 0.4% in June, as reported by Cotton Incorporated. Since the tariff increases were implemented in April, apparel import volumes have fluctuated significantly.
In April, the total weight volume of fiber imports rose by 14.7% year-on-year. However, this volume dipped by 11.1% in May before rebounding slightly with a 3.5% increase in June. According to Cotton Incorporated’s Executive Cotton Update for August 2025, apparel imports saw a 15.7% increase over the six months leading up to April.
Meanwhile, the Consumer Confidence Index from the Conference Board gained 2 points in July, reaching 97.2. After experiencing its lowest point during the pandemic in April, the index has bounced back to a range of 95-115, a level it has maintained for much of the past three and a half years.
Overall consumer spending remained nearly flat in June, with a mere 0.1% monthly increase and a 2.1% annual rise. June marked the slowest growth rate since February 2024. Spending on clothing rose by 0.3% in June, following a notable 1.1% gain in May.
In terms of year-over-year changes, apparel spending increased by 4.2%. The rate of growth in clothing spending has consistently exceeded 4% since March, while the longer-term average growth hovers around 2%.
The U.S. economy grew at an annualized rate of 3% from April to June, recovering from a 0.5% contraction in the first quarter. This recovery was aided by a significant 30.3% decline in imports due to tariff hikes. The initial GDP estimates for Q2 from the U.S. Bureau of Economic Analysis indicated that consumer spending rose by 1.4%.
The Federal Reserve’s key inflation measure recorded an annual rate of 2.8% in June, remaining stable compared to May and aligning with both six- and twelve-month averages. This figure is above the Fed’s target of 2%.
In July, the economy added 73,000 jobs; however, downward revisions for May and June adjusted previous job estimates down by more than 250,000. The unemployment rate rose slightly to 4.2%, while wages showed a year-over-year increase of 3.9%, keeping them above inflation by more than one percentage point.
