Regular readers know that from time to time, I ask for comments on the signs of strength and weakness they see in their local economy. The last time we sought input, it appeared that the upper middle income parts of the country (suburban Boston, the better parts of Seattle, San Francisco and Silicon Valley, the tonier parts of Minneapolis) ranges from robust to smokin’.
While the plural of anecdote is not data, a local fashionista (which means she has a acute social trend antennae) and I both observed in a tight timeframe signs that the upper middle class in New York City are pulling in their oars. Her indicators included the Manhattan flagship Williams Sonoma store near Bloomingdales’ closing (and in the fall, when you expect retail stores to fold their tents after the Christmas selling season) and a very high end cashmere designer having a sample sale now, when they’ve never had sample sales prior to March. My portents took place when I went to my hair place, and a woman I see there only every other or third visit accosted me trying to get me to include her visit. And it wasn’t just that she pressed me to see her; there was an aggressiveness about it that seemed desperate. Similarly, when I went to a shoe store from which I only very occasionally buy shoes (as in the last pair I procured there was well over two years ago), and had settled on a pair, the owner came out and tried to get me to buy a second, even pricier pair. Mind you, this is a dog-whistle sort of store; I imagine their mainstream customer is the wife of a hedgie/private equity guy or a Wall Street Big Producer. I’m not their target demographic, but I do buy their simple loafers once in a great while because they are phenomenally well made, fit my difficult feet well, and wear like iron. So for the owner to come out and work on an unlikely prospect like me verged on being unseemly.
The top 0.1% are presumably sailing on unperturbed, for the most part. Russian oligarchs are constrained by the state of the oil markets and the ruble, but Chinese are sending money out of the country at an even faster clip than before. But what of our domestic top 10% ex the 0.1% that has done well to very well in our “new normal”? Even if they aren’t hurting, fraught nerves and curtailment of spending among the affluenza would have ripple effects through the retail economy.
Is this nervousness and spending pullback limited to New York City, or do readers see a change in mood in their communities?