Key takeaways

• Used apparel is now part of the Consumer Price Index as secondhand shopping becomes more prominent in household spending. 
• Online resale platforms, younger consumers, and price pressures have helped turn secondhand shopping into a mainstream trend.
• The U.S. Bureau of Labor Statistics is also studying used electronics, books, and furniture, but those categories might be harder to measure for inflation.

America has a resale habit — and it can’t be ignored. The U.S. Bureau of Labor Statistics (BLS) recently added used apparel to the Consumer Price Index (CPI) and is studying whether other types of secondhand goods might be suitable for the closely watched inflation gauge.¹ 

Once associated with thrift stores and bargain hunting, the secondhand market has become a big business that includes everything from everyday items to designer handbags and premium apparel.² 

The U.S. secondhand apparel market is expected to reach $78.8 billion by 2030, growing at an average annual rate of 7.3%, according to a recent report from online clothing resale platform ThredUp.³ 

Why younger consumers are embracing resale

The trend has roots in the pandemic. Years of inflation and pressure on household budgets pushed many consumers to look for ways to stretch their spending, leading to more purchases of secondhand goods and apparel.⁴

The rise of online resale sites such as Vinted, Vestige, and ThredUp is another factor behind the trend. Such sites have expanded online access to second-hand offerings — including premium and luxury goods — with high standards for authentication and quality.⁵  

At the same time many younger shoppers have decided to incorporate such secondhand purchases into their normal shopping habits, with factors like lifestyle, sustainability, and social media all reinforcing the trend.⁶ 

Gen Z is expected to drive 40% of growth in secondhand apparel sales by 2030, according to ThredUp’s report, followed by Millennials at 31%. Many younger consumers are thinking about resale value even when buying new clothes: 52% of Gen Z and Millennials try to sell about half the items in their closets.⁷

Read more: Generation Money: Gen Z’s snapshot

How inflation helped drive the secondhand boom

The Bureau of Labor Statistics has taken notice. The addition of secondhand apparel in the CPI last year is notable; the category joins used cars and trucks, which have been tracked since the early 1950s.⁸

The resale trend may be being fueled, at least in part, by challenging economic conditions. The K-shaped economy has higher-income consumers — buoyed by stock market and real estate market gains — spending more, while lower-income households are looking for ways to cut costs. 

The result has been demand at both ends of the clothing resale market, from everyday bargains — on things like shirts, jeans, and dresses — to secondhand premium goods and jewelry.⁹ 

High inflation over the past several years has particularly weighed on lower-income consumers. The annual rate of consumer inflation rose 3.8% in April on a yearly basis, the fastest annual pace in three years. New apparel prices are at even higher rate of 4.2% over the past year. 

Even some high-end consumers are turning to the resale market in a search for greater value, with the price of luxury goods jumping as much as 30% since the pandemic.¹⁰

Read more: The K-shaped economy: What consumers should know

Will other secondhand goods be added to the CPI?

The rise in secondhand buying isn’t limited to apparel. According the BLS, Americans are increasingly buying secondhand books, media, electronics, and furniture — particularly used textbooks and refurbished electronics.¹¹ 

The BLS is studying those categories; however, bringing them into the CPI would present unique challenges. Unlike apparel, markets for used books and furniture often include collectibles, antiques, and other items that appreciate in value and are primarily viewed as investments.¹²

The CPI is intended to measure consumer spending, so the BLS would need to figure out how to distinguish between purchasing collectibles and other everyday items.¹³ 

Regardless of whether books, electronics, or furniture eventually make it into the CPI, the addition of used apparel signals a broader shift. As resale becomes a larger part of household spending, the government's inflation measure has changed alongside it.

Read more: Trade-ins and cash-outs: How the circular economy is paying off for shoppers