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US luxury spending slows ahead of midterms, credit card data shows

By Thomson Reuters Oct 6, 2026 | 6:07 PM

PARIS, Oct 6 – US credit card spending on luxury brands fell for a third consecutive month in September, retail lender Citi said on Tuesday, signalling further weakness in the industry’s biggest market as the US heads into ​the November 3 midterm elections.

Buffeted by prolonged weakness in China and the economic ‌fallout of the Iran war, luxury brands have pinned hopes on resilient demand from wealthy US shoppers, including a growing cohort of AI millionaires, to offset softer sales elsewhere and help lift the sector out of a prolonged downturn.

While continued wealth growth among affluent consumers supported the top-end of the market in September, ‌overall ​US luxury credit card purchases fell 6% from a year ⁠earlier, after declining 4% in ⁠both July and August, Citi analysts said in a research note.

The luxury brands most exposed to the US include Tapestry, owner of Coach and Kate Spade; French conglomerate LVMH, known for brands like Louis Vuitton and Tiffany; and Italy’s Ferragamo, they said.

Still “brands ​with greater exposure to higher-end consumers should remain relatively resilient, supported by equity-market wealth effects,” Citi said.

Spending on leather goods and ready-to-wear items improved sequentially in September, the ⁠note added, while watches and luxury jewellery deteriorated even ⁠further.

Most soft luxury brands which sell apparel, shoes and leather goods ​have raised their prices by low single digits in percentage terms so far this year, slightly ​below the low to mid-single-digit price increases from watch and jewellery makers, ‌the note said.

A COOLING ECONOMY

The Citi data, based on millions of credit card transactions, follows surveys from the Conference Board and the University of Michigan that showed growing unease about the US economy ahead of the midterm elections, when voters will decide control of Congress.

The run-up to ⁠elections is often marked by heightened caution among consumers and businesses as political uncertainty weighs on spending decisions. Economists say rising US Treasury yields and mortgage rates could further cool economic activity.

Morgan ⁠Stanley analysts said in September ‌that the downturn in US luxury spending leaves brands with little ⁠scope to deliver the long-awaited return to growth after two consecutive ​years ‌of contraction.

The brokerage expects luxury groups to flag weaker US demand ​during the ⁠upcoming earnings season, which begins on October 12 when LVMH, widely seen as a bellwether for the industry, reports third-quarter sales.

Gucci owner Kering, which releases earnings on October 22, told analysts last week to expect a slowdown in the US market, according to Italian brokerage Equita.

(Reporting by Alessandro Parodi in Paris and Danielle Kaye in New York; Editing by Lisa Jucca, Mark ​Potter and Cynthia Osterman)