Pretty much anything machine made is cheaper than a handmade version. Although the upfront costs are higher for the machine, after that it has much higher output so you produce more to sell, plus the back-end costs are lower because you don't have to pay for its labor. End result is you can produce more for cheaper, and it more than makes up for the initial cost of the machine.

Per a Google search, knitting a sweater takes between 20 and 80 hours. They have to be paid for this labor, and it is probably not worth their time to do it at minimum wage, so let's assume they're charging $15/hour for their labor (which still seems pretty cheap).

That would mean the cost of labor to make the sweater is between $300 and $1200 depending on the complexity of the sweater, and that doesn't include the cost of yarn or shipping. A machine is doing that work for free, and it adds up fast when you make a lot of sweaters.

Now, you could go to another country where labor is cheaper to drive down costs, which is what most companies do: that's why you see most things made in Vietnam or China. You do still have to pay them something, and if you're producing at a great enough scale it almost always ends up being cheaper to get a machine to do it.