US Luxury Spending Drops for Third Month

US credit card spending on luxury goods experienced a third consecutive monthly decline in September, with purchases falling 6% compared to the previous year. This marks a significant slowdown for the industry's most crucial market as the nation approaches the November 3 midterm elections. Prolonged weakness in China and the economic impact of the Iran war have already strained luxury brands, which had been relying on affluent US consumers to offset softer international sales.

While high-end consumers showed some resilience, the overall trend points to a cooling economy. Brands with greater exposure to this demographic, including those under Tapestry, LVMH, and Ferragamo, are closely watched. Spending on apparel and leather goods saw sequential improvement, but luxury watches and jewelry deteriorated further. This economic tightening precedes a crucial earnings season, with LVMH's report on October 12 expected to be a key industry indicator.