Surprising jewelry sales while American luxury spending vacillates: Citi

Luxury retail sale was to stage a turnaround in 2025 after a promising fourth quarter marked by vacation purchases and a post-electoral euphoria. Instead, American credit card expenses on luxury products fell in the first five months of the year compared to the same period in 2024, according to Citigroup data.

For the month of May, luxury spending was better than expected, diving 1.7% from one year to the next, against a drop of 6.8% in April and 8.5% in March. Expenses combined for the best luxury brands, such as HermesEven increased 0.2% on an annual basis, according to Citi’s analysis of a subset of transactions by the 10 million American cards of the bank.

However, these gains are not also distributed. The jewelry turned out to be a bright point, constantly surpassing other categories such as leather items and ready-to-wear.

Monthly expenses on luxury jewelry has increased on an annual basis every month since September, according to Citi. In May, total luxury jewelry increased by 10.1% from one year to the next.

In addition, while other categories have been supported by the increase in average expenditure by customers, jewelry was the only type of product to see also an increase in individual customers. In the jewelry category, however, a cohort of high -end brands lost 2.7% of customers, but those who stayed spent 11.7% more on average.

Citi Thomas Chauvet analyst told CNBC that sales were probably supported by the perception of jewelry as investment documents. Jewelry can also have a more sentimental value, he said, as a gift or to commemorate a life stage.

“When you have $ 3,000 spending on luxury, you know, are you going to buy a jewel or a handbag for the same price?” He said. “Maybe the jewel gives you higher intrinsic value given the content of precious metals and emotional value and higher sense.”

Chauvet added that the recent gold price period allows additional justification.

“It is probably judicious to buy a Cartier bracelet now, since they have increased prices by less than 5% since the beginning of 2025, when gold prices have appreciated more than 25%,” he said.

The brands of handbags, on the other hand, have regularly increased prices up to 30% to 40% from the pandemic without the consumer having no more blow for their money, he said.

“The handbags have offered a limited novelty,” said Chauvet, with the warning that some fall and winter 2025 collections showed a certain promise. “In the past five years, from brand A to brand B, most of the forms and styles of bags are very difficult to differentiate from each other.”

Luxury watch expenses have experienced gains this year, but less regularly than that of jewelry. In all luxury watch brands, expenses increased by 14.7% compared to May 2024. However, the results for the highest watch brands dropped by 10% in May on an annual basis.

While overvoltages in Swiss surveillance exports have made the headlines, Chauvet said that he was largely motivated by retailers who razed and watch the manufacturers rush into producers with American subsidiaries in reaction to the threatened rate of 31% of President Donald Trump on Swiss goods.

The increase in spending in May can reflect an increase in consumers’ feeling, but not necessarily a turning point for high -end buyers, according to Chauvet. While the stock markets have rebounded, the US dollar is down approximately 10% over a year.

“We know that the American consumer feels better in life when the dollar is strong,” he said. “An example of this in luxury is your ability to travel and spend abroad for luxury is increased by a strong dollar.”

Other potential threats to consumer expenses are looming. The 90-day break in Trump’s so-called reciprocal rates is less than two weeks after expiration, and the Iran-Israeli conflict disrupted oil prices, noted Chauvet.