As apparel prices heat up, spending cools 22%
As apparel prices heat up, spending cools by 22%
As apparel prices heat up, spending cools by 22%
04.04.2025
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·As apparel prices heat up, spending cools by 22%
Apparel spending
Key takeaways
- Americans’ monthly spending on clothing and footwear decreased 22% in Q1 2025 (vs Q4 2024) and 6% YoY (vs Q1 2024)
- The cost of apparel in the U.S. has increased a moderate 0.55% since February 2024, but 3.80% since February 2022, per the Consumer Price Index (CPI)
- Gen X are the biggest spenders on clothing and footwear so far in 2025, spending $634 a month on average, $61 more than the typical American
After years of inflation, U.S. consumers are facing pricing pressures across a broad range of goods and services – and clothing is no exception. In the first quarter of 2025, consumers said they planned to cut back spending on discretionary categories such as apparel (37%) and footwear (35%) as the price of basic needs like utilities and food have increased.1
Empower Personal DashboardTM data reveals that in Q1 2025 Americans’ monthly spending on clothing and footwear decreased by more than one-fifth (21.72%) compared to Q4 of 2024 and 6.37% vs Q1 of 2024. Consumers spent an average of $573 a month in Q1 this year versus $732 in the three months prior.
Three-quarters of consumers say they’re engaging in “trade-down” behavior when purchasing products, such as delaying their purchase or opting for a lower-priced brand or retailer.2
Apparel prices keep inching higher
The cost of apparel in the U.S. has increased 3.8% in the past 3 years (Feb 2022 to Feb 2025), according to data from the U.S. Bureau of Labor Statistics.3 In February, the U.S. Consumer Price Index (CPI) for clothing increased a modest 0.6% month-over-month, following a decline of 1.4% in January.4
Which items are having the greatest impact on Americans’ wallets? The latest CPI data shows men’s shirts and sweaters have seen some of the biggest spikes, increasing by 5.81% in the past three years. Childrenswear has also gotten significantly more expensive: Girl’s apparel increased 7.96% in recent years, while boy’s clothing followed closely behind at 7.48%.
Footwear prices have stepped up, too: Today’s sneakers and shoes will set you back 1.24% more than they did less than three years ago.
How are consumers reacting to the changing market?
A new kind of window shopping
Empower research found Americans spend 2.5 hours a day “Dreamscrolling” — looking at dream purchases or things they’d like to one day own. Forty-nine percent of Americans dreamscroll for clothing, shoes, and accessories, and over half say the habit makes it easier for them to be smarter with their money.
Hey big spender
Still, despite the best of intentions to save, some discretionary spending is inevitable. This year to date, Americans spent an average of $573 a month on clothing and shoes, according to Empower Personal DashboardTM data. That could equate to $6,876 this year if the trend continues.
Some are more willing to part with their dollars than others: Gen X are the leading spenders so far, purchasing an average of $634 a month in apparel and footwear.
Average monthly spend on clothing and footwear by generation, year-to-date
Gen Z are currently the most frugal of the bunch, averaging $408 a month – a 35% decrease than their Gen X counterparts. Recent studies have found the younger generation has been hit harder by inflation than all other age groups, causing financial strain that could linger for years to come.5
Empower research shows that more than half of Gen Z (56%) and Millennials (51%) say their finances keep them up at night, compared to 37% of Gen X and 20% of Baby Boomers.
Resale revolution
With new clothing and footwear increasing in price, many consumers are turning to resale sites to shop for second-hand steals.
Today, the U.S. resale market continues to experience double-digit growth, 10 times faster than the traditional retail environment.6 By 2028, it’s estimated the U.S. secondhand market will reach $73 billion.7
One pre-loved luxury retailer found that when analyzed per wear, second-hand clothes were 33% cheaper in the long run than buying brand-new fast fashion products.8
The bottom line
While the annual inflation rate fell to 2.8% in February — a 0.2% decline from January — Americans are still contending with higher price tags.9
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1 McKinsey & Company, “An update on US consumer sentiment: Is growing uncertainty casting a chill on spending plans?” February 2025.
2 McKinsey & Company, “An update on US consumer sentiment: Is growing uncertainty casting a chill on spending plans?” February 2025.
3 Bureau of Labor Statistics, “Consumer Price Index,” March 2025.
4 Bureau of Labor Statistics, “Consumer Price Index,” March 2025.
5 USA Today, “Inflation is squeezing Gen Z more than other groups. Why are they bearing the brunt of it?” June 2024.
6 National Retail Federation, “Laying the foundation for modern resale with ThredUp,” July 2024.
7 ThredUp, “ThredUp’s 12th Annual Resale Report Reveals Resale Grew 15X Faster than Retail in 2023,” March 2024.
8 Vestiaire Collective, “Exposing the True Cost of Fast Fashion,” July 2024.
9 CNBC, “Inflation rate eased to 2.8% in February, lower than expected,” March 2025.
*Note: Averages rounded to the nearest dollar. Spending figures are based on aggregate and anonymous data from the Empower Personal DashboardTM as of April 2, 2025. Callouts for price changes are based on seasonally adjusted data from the U.S. Bureau of Labor Statistics Consumer Price Index.
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