I agree that when you start/increase an exercise program, it is common for your muscles to retain water. This increase in your lean mass can lead to little change in the scale, even as you are burning fat.
However, muscle and water are considerably denser than fat (check www.dailyspark.com/blog.asp?post=quiz_how_
for a great photo of this), and typically this shows up as inches lost, even if the scale is being unco-operative.
You say your clothes are fitting better, so you ARE losing fat. People have commented elsewhere in this thread about nutrition, but if you are losing inches, you are losing fat.
ST is actually an extremely effective fat burner. Without ST, up to 25% of your weight loss can come from lost muscle. Including ST in your program helps ensure more of your weight loss comes from fat alone, rather than a combination of fat and muscle. Don't stop strength training.