The Consumer Price Index (CPI) for garments increased by 0.6 per cent in September, both month-over-month and year-over-year, as per Cotton Inc. This places garment prices near their highest levels since the COVID-19 pandemic, with the April 2024 value only slightly higher. Currently, prices are 6.4 per cent above the 2019 average. Despite this rise, consumer spending on apparel fell by 0.8 per cent in August, though it remains 1.8 per cent higher year-over-year.
The Conference Board’s Consumer Confidence Index took a sharp drop in September, falling 6.9 points to a reading of 98.7. This mirrors the levels seen in April and June and remains within the 95–115 range that has persisted since August 2021. A continued dip in consumer confidence in the US could signal more cautious spending behaviour in the months ahead.
In a significant policy shift, the US Federal Reserve lowered interest rates by half a percentage point last month, ending the aggressive rate hike cycle that began in March 2022. Despite this cut, interest rates remain well above pre-pandemic levels, indicating the central bank is easing pressure but not stimulating the economy just yet. Meanwhile, China has implemented its own economic stimulus measures, cutting interest rates and easing mortgage restrictions to support its sluggish economy and housing sector, Cotton Incorporated said in its Executive Cotton Update – US Macroeconomic Indicators & the Cotton Supply Chain for October 2024.
Overall US consumer spending increased by 0.2 per cent month-over-month in August and was 2.9 per cent higher than the previous year. While apparel spending experienced a slight dip in August, earlier months like June saw robust growth, with a 4.2 per cent rise in garment purchases.
The US labour market showed strength in September, adding 254,000 new jobs, marking the highest monthly gain since March. This figure significantly exceeds the six-month average of 176,000 new jobs per month. Revisions to the job growth estimates for July and August were also positive, with July’s number rising by 55,000 and August’s by 17,000. The unemployment rate saw a modest decrease, falling from 4.2 per cent to 4.1 per cent.
After peaking at 5.9 per cent in March 2022, wage growth has slowed in the US, settling at 3.4 per cent in July 2024. However, recent months show a slight uptick, with wage growth reaching 3.9 per cent in August and 4.0 per cent in September, suggesting that wage pressure may be creeping back into the economy.
Policy revisions in both the US and China appear to be supportive of economic growth and demand for goods, including cotton products. Furthermore, Europe is showing signs of recovery from last year’s recession, providing additional optimism for global markets heading into the final quarter of 2024.
