Yenra : Shopping : Luxury Market Confidence : Optimistic spending by wealthiest ten percent of American families will push economy and stocks higher


An American Affluence Research Center study reveals continued optimism in the 12-month economic outlook of the wealthiest ten percent of Americans, the eleven million households representing about half of all consumer income and spending and a third of the total U.S. economy.

The index for the overall 12-month economic outlook remains at a relatively positive level, as does its individual components of business conditions, the stock market, and household income. The index, which declined only slightly from Fall 2004 due to a rise in the outlook for household income offsetting most of the declines in the other two components, remains in positive territory despite an 18-month decline to its historic low.

The Luxury Market: Spring 2005 Survey of Affluent Americans reflects a more optimistic outlook than the Conference Board's Leading Index, Consumer Confidence Index, and Consumer Expectations Index, with the latter down for the fourth consecutive month to the lowest level since July 2003. The University of Michigan's Consumer Sentiment Index, reflecting weakness in the Consumer Expectations Index, also declined in April for a fourth consecutive month to its lowest level since September 2003.

The affluent gave somewhat mixed signals about their future spending plans in the AARC survey. Plans for major purchases such as the acquisition of vacation homes, home remodeling, and cruises are at historic highs. However, plans to acquire motor vehicles, boats, and primary residences have declined over the past eighteen months.

The AARC surveys also track spending plans over the next year for seventeen categories of goods and services, including major appliances, home computers, furniture/furnishings, entertainment equipment, casual and upscale dining out, entertainment, recreation, domestic and international travel, designer and non-designer apparel, collectibles, fine jewelry, and political and charitable contributions.

Of the seventeen future spending indexes, eight are at positive readings and nine at negative readings. Of the seven categories at historic highs, four remain at negative readings. Two categories are at historic lows: home computer equipment and fine jewelry/watches.

The study provides information on brand quality rankings for eight different product categories (fine watches, fine jewelry, automobiles, lady's designer/couture apparel, major home appliances, home entertainment equipment, and cruise lines).

Data on the awareness of, ownership of, and intentions to purchase variations of the new concepts of fractional ownership and membership clubs for vacation homes, private jets, large boats, and exotic cars is also provided in AARC's new report.

Other new information includes identification of the employment status of the female head of household and the household decision makers for seven major spending categories.

The national survey included 346 men and women in the wealthiest ten percent of American households. The survey participants have an average income of $369,000.