Found under Hobbies/Misc $25.
Sims gain creativity and enthusiasm for art, when finished knitting a pile of clothing is created in their inventory which maybe sold for $100 or used to purchase a new outfit once the purchase is complete your Sims will be refunded a $100 towards their purchase.
Known issues: If you save and leave your game with a Sims knitting when returning to the game they will be knitting in very slow motion..I do not recommend you save your game while a Sims is knitting.
Sometimes the knitting does not go into their hands properly.
Thanks to our testing team for testing this, and thanks to pykkadilly for the request. Nonni for the lot in the image and video.