US Luxury Spending Falls for a Third Consecutive Month

Luxury spending in the United States fell for a third consecutive month in September, adding fresh pressure to an industry that had been relying heavily on American consumers to compensate for weaker demand in other major markets. Credit card data from Citi showed that spending on luxury brands dropped 6% year over year in September, following declines of 4% in both July and August.

The slowdown is particularly significant because the US has become one of the most important markets for global luxury brands. As demand in China remains subdued, American shoppers have been an important source of support for companies including LVMH, Tapestry and Ferragamo. A sustained pullback in the US therefore leaves luxury groups with fewer major markets capable of absorbing weakness elsewhere.

The latest figures also reveal that the slowdown is not affecting every luxury category equally. Spending on leather goods and ready-to-wear showed some sequential improvement in September, while watches and fine jewellery experienced a sharper deterioration. That distinction is important because luxury companies are increasingly competing for a consumer who is becoming more selective about where to allocate discretionary income.

Affluent consumers have not disappeared from the market. Continued growth in wealth, particularly among high-income Americans and technology entrepreneurs, is helping support the very top end of luxury spending. However, the broader customer base appears more cautious as economic uncertainty, elevated mortgage rates and higher Treasury yields influence household confidence.

Luxury brands are also facing the consequences of years of price increases. Although price rises for fashion, footwear and leather goods have moderated to low single-digit percentages in 2026, watches and jewellery have continued to record somewhat higher increases. For consumers who are already questioning the value of increasingly expensive products, further price increases could make purchases easier to postpone.

The timing is especially important for luxury companies entering the final quarter of the year. LVMH, widely regarded as a bellwether for the sector, is due to report third-quarter results on October 12, followed by Kering later in the month. Analysts expect the companies to provide a clearer indication of whether the American slowdown is temporary or becoming part of a broader weakness in luxury demand.

For the industry, the September figures reinforce a difficult reality: luxury is no longer operating in an environment where higher prices alone can reliably drive growth. Brands may increasingly need to balance exclusivity with perceived value, strengthen their relationships with their wealthiest customers and create products that justify premium prices.

With China still challenging and the US showing signs of cooling, the world's largest luxury market may no longer be able to carry the industry through its current downturn on its own.