Fabric suitable for the manufacture of rental shirts that are capable of being industrially laundered are made by air jet spinning an intimate blend of about 50--50 polyester/cotton (having wrapper fibers holding the yarn bundle together), vat dyeing the cotton component of the yarn (and disperse dyeing the polyester component), and then knitting the dyed yarn to produce a fabric with tightly formed stitches. The yarn is also scoured and finished prior to knitting. The knit fabric is preferably made into a rental shirt or like garment, the fabric having a good shrinkage, a colorfast, pilling, and life expectancy properties, and a soft hand. At the end of scouring in a jet machine, cationic softener is added which chemically bonds with the fabric cotton fibers, to provide softer hand over the life of the fabric. The finish formula includes amphoteric and hydrophilic silicone softeners to also provide soft hand, and a sewing lubricant to reduce the possibility of needle cutting during the garment sewing process.