If you had money in the stock market in 2013, you probably had a good year. And given that the top 1 percent of households own about 35 percent of equity and mutual funds, rich people had a very good year.
So it’s no surprise that the pleasure boat, aircraft and recreational vehicle industries also did well in 2013. Consumer purchases of these luxuries were up 19 percent through November, putting them on track for the best year since the salad days of 2003.
Spending on luxury goods doesn’t stop there. Purchases of jewelry and watches in 2013 are tracking thier best growth since 2004, according to a Morgan Stanley research report released today. The S&P Global Luxury index, comprised of companies ranging from Tiffany & Co. to Harley-Davidson Inc., surged 33 percent last year.
Meanwhile “surveys of the well-heeled consumer have indicated that outside of spending on luxury durable goods, luxury travel is also top on the list of desires,” the report said. That could be a reason why luggage purchases are poised for their best growth year since 2000.
For everyone else, things haven’t been so flush. Wages and salaries took nine months to pass their previous peak after taking a hit in January as the Social Security payroll tax cut expired. And the bottom 90 percent of households only hold about 19 percent of stocks and mutual funds.
We’ll need to see sustained gains among those households before consumer spending, which accounts for almost 70 percent of the economy, can shift into a higher gear.