US Luxury Spending Slows, Citi Data Shows
US credit card spending on luxury brands fell for a third consecutive month in September, according to data from Citi.
US luxury spending has slowed ahead of the November 3 midterm elections, according to credit card data from retail lender Citi. The data reveals a 6.0% decrease in luxury brand purchases from September 2022 to September 2023, marking the third consecutive month of decline. This trend is attributed to the economic fallout from the Iran war and prolonged weakness in China.
While affluent consumers in the US, including a growing number of AI millionaires, have shown resilience, overall luxury credit card purchases fell 6.0% compared to the same period a year earlier. The brands most exposed to the US market include Tapestry (Coach and Kate Spade), LVMH (Louis Vuitton, Tiffany), and Ferragamo. Luxury goods with greater exposure to higher-end consumers are expected to remain relatively resilient, buoyed by equity-market wealth effects.
However, watch and jewellery sales continue to decline. Most soft luxury brands, which sell apparel, shoes, and leather goods, have raised prices by low single digits this year. The Citi data is based on millions of credit card transactions and coincides with surveys from the Conference Board and the University of Michigan showing growing unease about the US economy ahead of the midterm elections.
Rising US Treasury yields and mortgage rates may further cool economic activity. Morgan Stanley analysts predict weaker US demand during the upcoming earnings season, starting October 12 with LVMH's earnings report.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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