Consumption has problems: drop in collector’s watches and luxury goods in the USA
The ECB and the FED continue to raise rates counting on the economy holding up, consumption continuing and real estate values not collapsing. However, some pessimistic signals are starting to come from the typical consumption of the middle class.
The Bloomberg Subdial Watch Index, which tracks the prices of the 50 most traded watches by value on the secondary market, continues to decline from its all-time highs reached in April 2022. Prices are below their July 2021 levels, approaching the lowest in the last two years.
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“According to Bloomberg, demand for expensive watches from major Swiss brands has cooled due to the slowdown in the economy, rising interest rates and the collapse of cryptocurrencies.
Watch-buying activity can be used as a barometer of average-income spending habits. If consumers have more money, purchases of discretionary items such as wristwatches will increase. We also pointed out that diamond prices have plummeted.
At the end of May, LVMH Moet Hennessy Louis Vuitton warned of a slowdown in its growth in the United States. An early sign of the risk of the luxury bubble bursting.
So it appears that the middle class is abandoning some consumption of status symbols
Goldman's Rich Privorosky recently pointed out that “ something is not quite right for consumers ” and asked: “ Have we run out of excess savings and are we going back to replenishing savings? “.
So, putting all these elements together, consumers continue to avoid secondary markets for watches, reduce spending on diamonds and decrease purchases of Gucci handbags. This all comes as many consumers have built up high credit card debt paying some of the highest interest rates in decades, depleted savings and endured two years of negative real wage growth due to the inflation storm. .
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The article Consumption has problems: decline in collector's watches and luxury goods in the USA comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-consumo-ha-dei-problemi-calo-orologi-da-collezione-e-beni-di-lusso-negli-usa/ on Thu, 29 Jun 2023 19:33:45 +0000.