US Apparel Prices Outpace Overall Inflation Again

US consumer prices continued to rise at a steady pace in August 2026, with headline inflation holding at 3.4% year-on-year, unchanged from July. The Bureau of Labor Statistics (BLS) reported that energy prices surged 16.3% compared to a year earlier, while core inflation, which excludes the volatile food and energy sectors, rose 2.4%. On a seasonally adjusted basis, the consumer price index increased 0.4% from July.

Apparel prices remain above headline inflation

Apparel prices rose 3.6% year-on-year in August, down from 3.9% in July but still above the overall inflation rate for the seventh consecutive month. On a monthly basis, the apparel index was unchanged from July. Among subcategories, men’s and boys’ apparel increased 3.7%, women’s and girls’ apparel rose 3.5%, and footwear was up 3.6%. Infants’ and toddlers’ apparel was the exception, falling 3.4%.

Jewellery and watch prices jumped 8.2% year-on-year, a significant slowdown from the 14.4% increase in July. This deceleration comes against a high comparison base following a 4.4% monthly jump in August 2025. Further up the supply chain, producer prices for apparel manufacturing rose 3.6% year-on-year, while textile mill products saw a 5.1% increase, according to preliminary BLS data.

Retail sales show modest growth

Advance estimates from the Census Bureau, updated in its annual revision on 28 September, indicate that sales at clothing and clothing accessories stores rose 0.7% from July to $26.50 billion in August. Compared with August 2025, clothing store sales were 4.1% higher in current dollars. However, when adjusting for the 3.6% rise in apparel prices, real growth was only about 0.5%.

Total retail and food services sales increased 1.1% from July and 5.4% year-on-year. Nonstore retailers, which include online sellers, grew 7.9% year-on-year, while department store sales were 1.8% higher than a year earlier.

Consumer confidence weakens

The Conference Board’s consumer confidence index fell to a revised 88.6 in August from 90.2 in July. The University of Michigan’s consumer sentiment index also declined, dropping to 51.7 from 55.2. Both surveys pointed lower in the same month, suggesting growing caution among consumers.

Labour market and monetary policy

The unemployment rate held steady at 4.1% in August, according to BLS. Employment at clothing, accessories, shoe and jewellery retailers stood at 1.15 million on preliminary data, while apparel manufacturing employed 72,000 people, down from 78,700 a year earlier.

The Federal Reserve left its target range for the federal funds rate unchanged at 3.50% to 3.75% in August, with the effective rate averaging 3.63% over the month.

Currency movements

The euro rose 1.54% against the dollar in August, reaching a monthly mean of $1.1593, up from $1.1417 in July, according to the European Central Bank. Compared with August 2025, however, the euro was 0.33% weaker against the dollar.

The bottom line

US apparel prices rose 3.6% year-on-year in August, outpacing headline inflation of 3.4% for the seventh consecutive month. Clothing store sales grew 4.1% in current dollars, slower than total retail and online sellers, and roughly 0.5% once higher apparel prices are taken into account. Both major consumer surveys weakened in August.

Note: this article combines the most recent official data available at the time of writing. Reporting lags differ by indicator and country, so not all figures refer to the same month. Each data point is labelled with its reference period.