, an upmarket American jeweller, reopened the doors of its flagship store on New York’s Fifth Avenue to the public on April 28th. At first glance the grand unveiling seems conspicuously ill-timed. Hours earlier the Bureau of Economic Analysis had reported that nominal consumer spending in America barely grew in March, amid stubbornlyYet the throng of well-heeled New Yorkers who queued up on opening day to enter what Tiffany has modestly rechristened “The Landmark” hints at a more nuanced story.
While annual consumer-price inflation in America has begun to ease, falling from an average of 6.5% last year to 5.0% in March, elevated price levels are weighing heavily on the less affluent, notes Gregory Daco of, a consultancy. Extra household savings amassed during the pandemic have dwindled from a peak of nearly $2.5trn in the middle of 2021 to roughly $1.5trn, with the bulk now held mostly by high-income households, according to Joseph Briggs of Goldman Sachs.
Consumers are bargain-hunting beyond supermarkets and department stores. On April 25th McDonald’s, a purveyor of cheap calories, announced an expectations-beating 12.6% sales growth in America for the first quarter, compared with the previous year. On April 20th, a Swedish maker of cheap furniture and homeware, said it was investing $2.2bn to expand its presence in America—days before Bed Bath & Beyond, an assuredly middle-class rival, declared bankruptcy.