Bad News: Luxury Spending Might go Down the Tubes
12:38 pm, August 12th | by Amy Tennery
But, according to one report, there was a certain sector of people who were driving the U.S. consumer market. Those people made at least $100,000 and liked shopping at Neiman Marcus (we think) and they were buying even when everyone else wasn’t. But now they’re about to stop. And this is a really big problem.
So why is luxury spending all of a sudden going to take a tumble — especially when it’s remained strong for a while now? And why is this such a big deal? We dug around for answers.
As far as the first question goes, the answer is (once again) this week’s Dow-saster. Reports are suggesting that the recent stock, uhhh, issues are going to have the biggest impact on luxury spending — more than regular folks spending. Super.
And why is this so especially bad?
For starters, the top 20 percent of the richest households has been holding up about 40 percent of the consumer spending lately, according to one JPMorgan economist. And, as we mentioned before, reports have shown that the luxury sector has been among the strongest in consumer spending, posting its tenth month of growth in a row last month. Seeing luxe spending tumble now is like the valedictorian getting a “C” on something. It’s alarming and bad and probably means they’ve been spending too much time with a shady crowd of underachieving buyers.
So let’s all just keep our (bejeweled) fingers crossed that this works itself out, okay?