Luxury Spending Pullback Signals End of Post-COVID Consumer Boom
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Wealthy Americans have been keeping the economy strong with robust spending, but that is now slowing down as they start pinching pennies more. This signals an end to the post-COVID consumer boom.
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Retailers catering to upper middle class like Apple, Coach, Nordstrom have seen sales drop over the past 3 months as those households reign in spending.
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High earning households are pulling back most on physical goods and housing purchases. Spending on experiences is still holding up.
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The wealthiest 20% have accounted for 45% of all consumer spending from 2020-2022, much higher than the typical 39% - so when they pull back it really hurts.
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Even high earners are feeling inflation and economic uncertaintyy, so are approaching "satiety" with less inclination for new spending on things like fine dining and luxury items.