US' retail apparel prices up 0.2% in December: Cotton Inc

The Conference Board's Index of Consumer Confidence surged for the second consecutive month in January, jumping by 6.8 points to reach 114.8, following a 7.0-point gain in December. This latest figure represents the highest level seen since the second half of 2021. The Conference Board attributed this notable improvement in attitudes to the slowdown in inflation, anticipated reductions in interest rates, and the consistently robust labour market, Cotton Inc said in its Executive Cotton Update - US Macroeconomic Indicators & the Cotton Supply Chain - February 2024.

In inflation-adjusted terms, overall consumer spending experienced a 0.5 per cent month-on-month increase in December. Year-on-year, overall spending was up by 3.2 per cent, marking the strongest annual growth rate since early 2022, when stimulus measures and the rebound from COVID-19 were propelling economic expansion. After a significant upswing in November (2.0 per cent), consumer spending on apparel continued to rise in December (1.6 per cent). Year-over-year, spending on clothing rose by 2.2 per cent in November and by 3.4 per cent in December. These increases stand in contrast to the year-on-year declines recorded each month between March and December 2023.

In 2023, the US economy defied recession expectations, experiencing resilient and robust growth, particularly in the latter half of the year. Real GDP expanded by 4.8 per cent in Q3 and 3.3 per cent in Q4, with an annual growth rate of 2.3 per cent, accelerating from 1.9 per cent in 2022. Widespread recession fears stemmed from a sharp rise in interest rates initiated by the Federal Reserve in March 2022. Despite expectations of a rate decrease in 2024, rates are not anticipated to drop enough to stimulate growth, as they are still expected to exceed the estimated neutral rate of 2.5 per cent, the report added.

Although interest rates may continue to restrain growth, the labour market remains strong, with unemployment below 4 per cent and wage growth outpacing inflation since May 2023. Consumer confidence is rising, bolstering consumer spending. The IMF forecasts US growth at 2.5 per cent in 2023, and 2.1 per cent and 1.7 per cent in 2024 and 2025, respectively. In January, the economy added 353,000 new jobs, with positive revisions to previous months. The unemployment rate remained steady at 3.7 per cent, while wages increased by 4.5 per cent year-on-year, showing a slight acceleration from the previous month.

Fibre2Fashion News Desk (KD)