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Yarn label questions

Hi. I have some questions on yarn labels. I have been knitting for some time now however I am confuses as to the label that is on the yarn. I tried researching but am not able to get an answer to my question. My concern is that I look at the label, and I see a 4x4 square with a certain knitting and crochet hook size and a certain gauge. What is the purpose of this?? Does it mean if I don't use the proper hook or needle size I shouldn't use the yarn?? I thought if a pattern calls for number 3-4- 5 and so on type of yarn i can just purchase that yarn and match gauge with my hook or needles. I'm confused sorry. I basically always thought you buy the type of yarn that is stated in the pattern then adjust gauge by the needle and hook so what is the reason for this diagram on the label, the 4x4 square with the specified hook and needle size??


The logo simply means that if you use the size needle or hook they suggest, you will probably meet that gauge -that is to say you'll get about that many stitches and rows to equal 4 inches. You are not required to use that size needle or hook, and it will vary according to how loosely or tightlyyou work. It makes it a bit easier to substitute yarns. The closer the gauge on the label is to the gauge in your pattern, the more likely it is to be a good substitute.

to Sally J's advice -
The other thing about the suggested needle/hook size on the band is that these are the sizes that will give you a normal-feeling, supple draping fabric if you knit or crochet at a moderate gauge.
For instance, knitting worsted is usually knit with a medium-large needle (7-9 or so) to achieve the sort of feel that you may be used to in a sweater.

Last year, tired of less-than adequate handwear and not liking felted stuff on my hands, I made myself a pair of mittens of worsted weight on size 1 needles. They are really dense and totally impervious to wind and snow. The yarn/needle combo was perfect for that application, but I wouldn't care for it in a sweater.