The recession is over, at least for the luxury goods market.
Sales of luxury goods worldwide are expected to increase by 10% by the end of this year, after having declined by 8% the previous year, according to a report from Bain & Co., a global consulting firm.
The report found that increased demand in the U.S. and China will help the global luxury goods market to nearly match the sales level it hit in 2007, before the recession began. For the U.S. in particular, sales of luxury goods are expected to increase by 12% this year.
By comparison, other reports have shown retail sales as a whole are beginning to recover, but are still short of where they were before the recession began.
To some extent, the news that the luxury goods market is expecting robust growth may be yet another sign that the wealthy seem to have largely recovered from the recession, while the rest of the country is slow to bounce back. In fact, there is much anecdotal evidence that the gap between the lifestyles of the rich and poor expanded during the economic downturn.
That said, a boom in the luxury market is vital to the economic recovery as a whole. Earlier this year, economists noted that wealthier Americans – like most of the country – had cut back on spending, which in turn was hurting our gross domestic product. In a very real sense, we need the wealthy to spend so the economy can grow faster, which will make businesses feel more confident and employ more people so one day soon, the rest of the country will feel comfortable buying products they don’t need at the mall.
So rich people, keep on buying those Rolexes and Louboutin shoes for the good of the country.