Found this to very helpful and sharing it with you…
Link to site : http://www.hgtv.com/design/make-and-celebrate/handmade/how-to-knit-a-sweater-for-a-baby
Knitter Lynne Foster demonstrates how to knit a sweater for a baby. This project is good for beginners. The trickiest part is knitting five panels together: two for the front, two for the sleeves and one for the back. Either the garter stitch (k all rows) or the stockinette stitch (k one row, p one row) can be used.
Note: The kind of yarn used will not only make the sweater look different but will slightly change the size. For a much larger sweater, use #13 needles with heavy chenille yarn.
A few suggestions to change the look:
Crochet around the sweater with the same or contrasting yarn
Run a narrow ribbon through the openings in the crochet stitch down the front and around the bottom edge of the sweater. Use the same ribbon to tie the jacket together.
Fold the two unstitched top edges of the front panel back to form “lapels” and take a stitch or two to hold.
Add a length of ribbon to each side of the lapels to tie the front of the sweater together.
Using the same ribbon, crochet around the bottom edge of the sweater.
Knit long when making the sleeves and turn them back for cuffs.
Materials and Tools:
two-ply weight yarn
Size: 9″ x 10″
1. For the back: Cast on 32 sts and knit for 10 inches.
2. For the front panels (make two): Cast on 16 sts. and knit for 10 inches.
3. For the sleeves (make two): Cast on 26 sts. and knit for 6 inches.
4. Sew together as follows: Place the two front panels on top of the back piece, lining up the shoulders and the sides. Place the sleeves on a table top so that the stitches are running horizontally as you knit them. Give each panel a quarter turn and fold it in half lengthwise (horizontally).
Position each sleeve so that the folded edge is even with the shoulder (top edge) of the “sweater.” This is just to visualize how everything will go together.
5. Remove one of the front panels and the two sleeves. Sew the top edge of the back piece and the top edge of the remaining panel together, starting in the center and sewing to the outside edge. This will be the shoulder seam.
The portion of the front panel that was not stitched can later be folded back for a lapel if you wish.
6. Fold the front panel back so it is flat on the table top.
7. Pick up one of the folded sleeve pieces and place it with the folded edge lined up with the shoulder seam. Unfold it so that the entire end of the piece is lined up along the edge of the sweater. Sew the two pieces together.
8. Fold the front panel back into position. This will also fold the sleeve into position. Sew the bottom seam of the sleeve together.
9. Sew the bottom portion of the sweater front and back together, sewing from underneath the arm to the bottom edge.
10. Repeat the above steps on the other side of the sweater.