A new report indicates Americans are spending less on luxury items across nearly every category — except for one.
U.S. credit card spending on luxury goods between January and May has dropped compared to the same period last year, CNBC reports, citing new data from Citigroup. But luxury jewelry sales have consistently increased on an annual basis since September, with spending increasing more than 10 percent in May 2025 compared to May 2024, the data indicates.
There was also an uptick in the number of individual consumers buying luxury jewelry, according to the report.
Customers see jewelry purchases as long-term investments, which could be contributing to this trend, Citi analyst Thomas Chauvet told CNBC.
“When you have $3,000 to spend on luxury, you know, are you going to buy a piece of jewelry or a handbag for the same price?” Chauvet said. “Perhaps the piece of jewelry gives you superior intrinsic value given the precious metals content and superior emotional value and meaning.”
An uptick in gold prices could also explain the trend, Chauvet said.
“It is probably sensible to buy a Cartier bracelet now, given they have increased prices by less than 5% since the beginning of 2025, when gold prices have appreciated by over 25%,” he added.
Luxury watch spending is also on the rise, with purchases across brands up 14.7 percent in May 2025 compared to May 2024.
While luxury spending is dropping, it still performed better than expected in May, CNBC reports. Luxury spending only dropped 1.7 percent in May 2025 compared to May 2024. However, spending dropped 6.8 percent in April and 8.5 percent in March compared to the same months last year.
President Donald Trump’s widespread tariffs could also be playing a role in changing consumer habits, CNBC reports. In April, Trump implemented and then paused tariffs on imports from nearly every country. He then committed to reaching trade deals with “90 countries in 90 days.”
That pause is set to expire next week, and Trump says he’s not planning to extend the pause any further. His administration is now preparing to send letters to countries about the upcoming trade penalties, he told Fox News’s Sunday Morning Futures.
“We’ll look at how a country treats us — are they good, are they not so good — some countries we don’t care, we’ll just send a high number out,” Trump said.
