New York, NY, United States (AHN) – The economic recovery of the U.S. has polarized residents. The division is particularly felt for the coming yearend holiday as those on the upper end splurge on expensive gifts, while those on the lower end continue to tighten their belts and do without.
According to high-end retail outlets, sales of pricey merchandise has increased by double digits, indicating recovery is starting to be felt in the upper class.
Gifts costing seven digits are back on the shelves in some luxury department stores, while sale of luxury items such as bags and jewelry are exceeding merchant expectations.
On the extreme end, there is an increase in demand fpr baby formula every two weeks at low-end retailers, indicating poor residents rushing to grocery stores to purchase basic needs the minute they cash their unemployment checks.
While sales are up even in low-end chains, groceries are the fastest selling consumer goods.
Economic experts said the two trends indicate the uneven pace of recovery across different income levels.
Those who benefited the most from the stock market rebound and low mortgage rates are affluent households, now on a spending spree for the Christmas holidays.
However, the recovery seemed slower for poorer families whose salaries – for those employed – could barely meet needs or who are on an unemployment check-to-next check basis.
Even the middle class are avoiding going into debt for the Yuletide season. Purchases using credit cards over the Thanksgiving weekend plummeted at a 27-year low, while use of general credit cards such as Visa and MasterCard went down 11 percent for the third quarter compared to last year, according to data from credit bureau TransUnion.
Another reason behind the lower credit card purchases is that more than 15 million Americans lost their cards due to more stringent credit card laws passed in 2009.
Shoppers have also pared their Christmas shopping list to just buying gifts for immediate members of the family.
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