U.S. luxury spending grows, wealthy are happy-survey

Wed Jul 21, 2010 3:58pm EDT
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By Michelle Nichols

NEW YORK (Reuters) - Spending on luxury goods by affluent Americans is forecast to grow by $28 billion in 2010, experts said on Wednesday, and the wealthy are happy despite most believing the United States is still in recession.

The "Survey of Affluence and Wealth in America" found luxury spending would rebound for the first time in three years, led by purchases of automobiles, services, travel and children's clothing.

But the online poll of 1,900 households with an average annual income of more than $235,000 by American Express Publishing and Harrison Group showed 94 percent still believe the United States is in recession.

The households surveyed between January and April represent 10 percent of Americans and 50 percent of all retail sales.

"Interest in luxury is trending up, but this interest is qualitatively different from the unbridled enthusiasm that characterized ... the mid-2000s," said Jim Taylor, Harrison Group's vice chairman. "People take pride in the way they have managed their finances and family through the recession."

"We think it's going to be a pretty good Christmas (for retailers)," he said.

And this pride had led to happiness among the rich, with 71 percent saying they are happy, up from 40 percent in 2007.

"It's because they didn't know they could survive something this bad," Taylor told the Luxury Marketing Council of New York on Wednesday. "They have got competent, they have gotten close to their family, they have self-esteem from their ability to handle a crisis."   Continued...

<p>A passerby walks past the Fendi store in New York, February 15, 2007. REUTERS/Keith Bedford</p>