A baby should be dressed in one extra layer than what the adult is wearing. Overdressing a baby can cause sudden infant death syndrome which is common. Newborn babies should be swaddled because they feel safe and soothed like they are still in the womb.
A cotton or muslin material is a good choice for swaddling newborns because they are light and provide flexibility. Some of the appropriate ways of how to dress a baby for sleep are; During winter, they should be dressed in some warm pair of pajamas and the blankets should not be loose.
During summertime, they should be dressed in a cotton bodysuit which can be short sleeve, a muslin, swaddle, or in a light sack. Babies are not allowed to sleep wearing hats or any loose clothing because they might slip and cover their little faces hindering breathe.