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America’s rich are back—and ready to shop: Alini

A falconry set for Christmas?



Only Neiman Marcus could call a Christmas catalog featuring a $150,000 custom-made falconry set and a $1.5-million outdoor entertainment system “the heart of giving.” But if “giving” means treating yourself, family and friends to absurd and absurdly expensive gifts, then Neiman Marcus is probably in luck. America’s rich, it seems, are finally in the mood to splurge this year.

Global sales of luxury goods are on track to surpass 2012 in real terms, according to global consultancy Bain, and you can thank America’s millionaires and billionaires for that. Apparently, they’re filling in for their Chinese counterparts, who aren’t feeling particularly chipper this year, with the economy there slowing and Beijing cracking down on lavish gifts to corrupt officials. In part, this appears to have prompted some well-heeled Chinese shoppers to take their business to place like Los Angeles and Las Vegas, away from Beijing’s prying eyes. In part, though, Bain says “a steady pace of store openings in second-tier cities in the U.S. interior” signals that the American market has taken on a momentum of its own.

In all likelihood, it’s the stock market that’s driving the rich’s shopping fever. The S&P500 blew past 1800 last week, for the first time ever. The Dow is up almost 23% since the beginning of the year, and the Nasdaq touched a 13-year high last Friday. Poorer people usually spend more when the price of their homes rise — because they feel richer. Affluent Americans are more inclined to splurge when financial markets rally, because that’s where they store most of their wealth. Here’s a concrete example: Say you invested $100,000 in Netflix, at the beginning of the year. As of the end of last week you’d be about $265,000 better off. No wonder a well-known survey of millionaires’ sentiment hit an all-time high in September. (It dipped in October, but that was likely over temporary fears about the government shutdown).

So, what does this all mean for the U.S. economy at large? Strictly speaking, it’s good news. Outlays by top earners have remained subdued for four years after the financial crisis, even though the rich recovered their recession losses much faster than ordinary Americans. That they now once again feel like dropping the big bucks matters a whole lot, considering that the top 5% of consumers account for an estimated 37% of all consumer spending.

In the greater scheme of things, as I wrote last week, the rich aren’t as good an engine of growth as your average Joe shopper. Their shopping binges are as volatile as the stock market that tends to fuel them. Still, in an economy where low and middle class consumers are bogged down by weak job growth and stagnating wages, better to have the rich spending than nobody at all.

Erica Alini is a reporter based in Cambridge, Mass., and a regular contributor to, where she covers the U.S. economy. 

Follow @ealini