In contrast, the average import costs for cotton-dominant apparel declined by 1.0 per cent month-over-month and were down by a significant 7.2 per cent year-over-year, suggesting a potential easing in supply chain pressures.

Consumer confidence showed a slight uptick in July, as the Conference Board's Index of Consumer Confidence climbed from 97.8 in June to 100.3. Despite this improvement, the index remains within a lower range that has been typical for the past two years, indicating cautious optimism among consumers, Cotton Incorporated said in its Executive Cotton Update – U.S. Macroeconomic Indicators & the Cotton Supply Chain - August 2024.

Consumer spending, a key driver of the US economy, demonstrated continued growth. Overall spending increased by 0.2 per cent month-over-month and 2.6 per cent year-over-year. Notably, spending on clothing surged by 1.1 per cent month-over-month and an impressive 4.7 per cent year-over-year, marking the strongest annual growth rate for apparel sales since early 2022, when stimulus payments were still influencing spending patterns.

However, financial markets faced heightened volatility, driven by a selloff in technology stocks and concerns about the U.S. economy's strength following the release of the latest employment data. The labour market, which has been a pillar of the economy's post-pandemic recovery, is showing signs of slowing. The unemployment rate increased from 4.1 per cent to 4.3 per cent in July, partly due to a 420,000 person increase in the labour force. While the unemployment rate remains low by historical standards, this rise has contributed to concerns about a potential recession.

Wage growth also decelerated, with the year-over-year rate of change in average hourly wages slowing to 3.6 per cent in July, continuing a downward trend that began in March 2022 when wage growth peaked at 5.9 per cent. Despite this slowdown, wage growth remains above the overall inflation rate, which was 3.0 per cent higher year-over-year in June.

The US economy added 114,000 new jobs in July, but revisions to previous months' data revealed a less robust job market than initially reported. With the labour market softening and inflationary pressures easing, there is speculation that the Federal Reserve may consider lowering interest rates gradually to prevent an economic contraction.

Fibre2Fashion News Desk (KD)