In March, the US experienced a significant rise in garment prices, marking the largest monthly increase since the end of 2021. The Consumer Price Index for garments increased by 0.7 percent, with retail apparel prices also seeing a slight year-over-year increase of 0.2 percent.
The Conference Board reported a decrease in the Index of Consumer Confidence for the third consecutive month in April, dropping 6.1 points to a level not seen since July 2022. This decline in consumer confidence aligns with cautious spending patterns observed recently, as stated in Cotton Incorporated’s Executive Cotton Update for May 2024.
Import costs for cotton-dominant apparel fell by 0.6% in March, but have increased by 6.2% compared to 2019 levels. This reflects ongoing challenges in the global supply chain.
Consumer spending on clothing declined slightly in March after a weak period of sales last year. Overall, consumer spending increased by 0.5% in March, showing a rebound from earlier in the year. In contrast, the US job market experienced slower growth in April with only 175,000 new jobs added.
The Federal Reserve’s decision to keep interest rates unchanged in May signals a commitment to economic stability despite low growth rates. The US economy is currently experiencing its slowest expansion since 2022, with a growth rate of only 1.6% in the first quarter of 2023 according to the Executive Cotton Update.
The IMF has updated its global GDP projections, expecting steady growth but at a slower pace than in previous decades. The US is predicted to have a 2.7% expansion in 2024. The interplay between consumer behavior, inflation, and job market dynamics will play a crucial role in shaping the economic outlook in the future.
