Back-to-School Boost Lifts U.S. Apparel Retail

Key Stats

• +1.0% apparel sales in August vs. July
• +0.6% overall retail sales (same period)
• +4.8% year-to-date apparel sales (Jan–Aug 2025 vs. 2024)
• +3.8% year-to-date overall retail sales

U.S. apparel retailers posted stronger-than-expected sales in August as back-to-school shopping lifted demand, while muted clothing prices helped sustain momentum despite a sharp deterioration in consumer sentiment tied to tariff worries,  according to the Census Bureau.

The Commerce Department’s Census Bureau reported retail and food services sales rose 0.6% in August from July. Within that total, clothing and accessories store sales advanced by about 1.0%, extending steady gains seen through much of the year. Year-to-date through August, overall retail sales were up nearly 5% compared with the same period in 2024, with apparel a relative outperformer supported by seasonal promotions and strong back-to-school demand.

Inflation data from the Bureau of Labor Statistics showed the consumer price index rose 2.9% in August from a year earlier, with core inflation running at 3.1%. Apparel prices, by contrast, edged up only 0.5% from July and just 0.2% over 12 months, underscoring the sector’s restrained pricing compared with services and other goods.

Also Read: UK Retail Sales Rise 0.6% in July, Quarterly Dip 0.6%

The University of Michigan’s preliminary September survey showed its headline consumer sentiment index fell to 55.4 from 58.2 in August, a drop of nearly 5% on the month and down more than 20% from a year earlier. Tariff concerns were widely cited by respondents, and the survey noted particularly steep declines among lower- and middle-income households.

With eight months of sales data in hand, the retail apparel sector is holding steady, but the final months of 2025 are expected to be more challenging. Tariff-related costs and weakening consumer mood could weigh on holiday season demand, which typically drives the bulk of annual profits for clothing chains. For now, apparel retail in the United States is supported by seasonal demand, restrained inflation and discount-driven traffic, but with sentiment at multi-year lows and tariff risks mounting, the durability of the sales momentum will be tested in the remainder of the year.