Rich Will Spend More, But Value Still Key

Rich Americans are expected to spend an extra $26.6 billion on luxury goods this year but they will do so with an eye toward value as the country recovers from recession, a poll released on Friday found.

Spending on luxuries, excluding cars and travel, is set to rise 8 percent to $359 billion compared to 2010, according to the sixth annual American Express Publishing and Harrison Group survey.

While the number of affluent families planning to spend more has almost doubled in the past three years, they are emerging from the recession seeking value, quality and service for their money, said Jim Taylor, vice chairman of Harrison Group.

"There will be more money spent, but it doesn't mean it won't be spent without the prudent skills learned as the result of a very difficult recession," Taylor said.

"This is a survivor's economy with people who have succeeded in surviving the recession demanding a new form of respect," he told a news conference.

The Survey of Affluence and Wealth in America polled 1,458 families with a discretionary income of more than $100,000 -- representing the wealthiest 10 percent in the United States who account for about 50 percent of all consumer spending.

It found that 15 percent of these families plan to spend more in 2011, up a quarter from 2010 and almost double from 2008. The number of families cutting spending was nearly halved from last year to 9 percent and down two-thirds from 2008.

Lower anxiety
Rich families save an average of a quarter of their incomes annually, the poll found, and 34 percent said they were looking forward to spending more money this year.

Taylor said that while 70 percent of affluent Americans still believe the country was in recession, they were less anxious. Concern over job loss has fallen 50 percent from 2010 and worries about the potential failure of their companies are down to 11 percent from 28 percent.

Almost three-quarters said they had become more resourceful because of the recession

"In the end, the increase in spending we foresee is not a return to the wanderlust of the past, but rather, an expression of sensible, resourceful, self-confident consumers expanding their portfolio of needs," he said.

"The nearly $4 trillion in their money market funds gives these consumers the power to purchase with cash. Their value equation reflects the price of recession: mature judgment," Taylor said.

A 2010 stock market rally, which pushed up the Dow Jones Industrial Average 11 percent, has also helped sway consumers.

Consumer spending, which accounts for 70 percent of U.S. economic activity, grew at a brisk 4 percent pace in the final three months of last year.

But U.S. retail sales posted their smallest gain in nine months in March, as auto sales plunged and consumers felt the sting of higher gas prices.

The online wealth survey was conducted from January 31 to February 14 and had a margin of error of plus or minus 3 percentage points.

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  • by beresieL Location: California on Apr 17, 2011 at 09:36 PM
    How I wish I could be one of those rich people that could spend extra on luxury. There so many Americans who are suffering from poverty just like what I read in an article which says that with a job under your belt, poverty doesn't stand a chance. Having a job empowers customers to provide. If it were left up to the Anti-Poverty Coalition of Greater Dallas, some jobs should really be forfeit in their crusade. The coalition told the Dallas Observer that payday lending jobs must be sacrificed, supposedly in the name of fighting poverty. Here is the proof: Killing payday lending does not fight poverty. See how fortunate rich people are, just sharing.
  • by Anonymous on Apr 16, 2011 at 05:25 PM
    Will somebody please give me a good definition as to what "Rich" is? And then ask any politician what their definition of rich is. Bet you'll never get a straight answer out of them, while they sit on their six figure salaries...
  • by Barlow Location: Winterville on Apr 16, 2011 at 04:25 PM
    Snake, Who is Jefferey Imelt? Is that the new Fixed Snooze Boogie Man? I thought you were a George Soros guy. Hey, did Obama get your guns yet? That Kenyan socialist, communist, (you fill in the blanks). You keep taking whatever those rich people you love are willing to give you. And, go figure, it will be less and less for you and more and more for them. You go ahead and "like" that. I never will.
  • by Barlow Location: Winterville on Apr 16, 2011 at 09:09 AM
    Value? You mean they are going to buy cheaper goods from overseas manufacturers like the rest of us? That would be great! They get to keep their Bush tax cuts and then spend their money overseas. They just keep on givin!
    • reply
      by Obama Snake Oil co on Apr 16, 2011 at 02:23 PM in reply to Barlow
      yeah Barlow, just like Jefferey Imelt the big Obama supporter, just take it overseas. You have a sick and perverted view of the just don't seem to understand that those of us who actually have real jobs work for them. And, we actually like doing so. When you punish them, you punish us...communist!
      • reply
        by Anonymous on Apr 17, 2011 at 04:13 AM in reply to Obama Snake Oil co
        Typical Hypocrite, Yelling about Jefferey Imelt, but ignores people like the Koch Brothers. Snake Oil is just another Party over America Wingnut, looking for a scapegoat.
  • by taxanon Location: Podunk on Apr 16, 2011 at 08:44 AM
    Tax 'em , tax 'em, tax 'em.
  • by Soon to be Rich on Apr 16, 2011 at 08:11 AM
    I promise I'll spend more when I win the lottery tonight :)
  • by Mustang Location: midstate on Apr 16, 2011 at 04:30 AM
    My wife wanted me to take her to somewhere expensive last night. I took her down to the gas station!
  • by Mike Location: Edenton on Apr 16, 2011 at 04:13 AM
    This is encouraging news. With so many people in our area tied to the boat building industry maybe some folks will be able to return to work, getting off the government payroll and paying in taxes. Win - Win! Oh NO.... but Obama wants to tax those "rich" people more so maybe they won't be spending the money they won't have after all.
  • by BLAHammed on Apr 16, 2011 at 03:07 AM
    Everybody is going to spend more on everything.It is called pinnochioBLAHmanomics.

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