US luxury spending slows ahead of midterms, credit card data shows
- Luxury credit card spending drops for third straight month, down 6% year-over-year.
- Big-name brands like LVMH, Coach, and Tiffany feeling the squeeze as US market cools.
- Watches and jewelry sales plummet while leather goods see minor, desperate upticks.
- Political uncertainty and rising interest rates killing the vibe for high-end consumers.
Brief Summary
The high-end retail sector is officially sweating as American luxury spending continues its downward spiral. Despite hopes that AI wealth and affluent shoppers would save the day, credit card data from Citi shows a consistent decline in purchases over the last three months. With major brands like LVMH and Tapestry bracing for tough earnings calls, the appetite for status symbols is clearly waning as economic anxiety takes center stage.
Why This Matters
When the wealthy stop buying handbags and watches, it is rarely a sign that the rest of the economy is about to boom. This cooling trend reflects a broader, palpable unease about where the country is heading. As you navigate your own finances, keep in mind that when luxury spending retreats, it often acts as a canary in the coal mine for tighter credit, reduced corporate hiring, and a general tightening of the belt that eventually trickles down to everyone. Pay attention to how these major retailers report their earnings, as they are often the first to signal when the party is truly over.