Economic uncertainty and inflation are weighing on American confidence, but luxury and fashion brands continue to see the US as a major growth market. As the holiday shopping season approaches, analysts expect consumers to keep spending—although with greater attention to value, quality, and price.

With the US midterm elections approaching, consumer anxiety is rising. Yet, despite growing concerns about inflation and the economy, American shoppers have not stopped buying fashion.

An October survey by Economist/YouGov found that 34% of respondents considered the economy and inflation the most important issues facing the country. Meanwhile, 67% disapproved of President Donald Trump’s handling of inflation, and 48% said they felt more pessimistic about their future than they had a decade ago.

Consumer confidence has also weakened. The University of Michigan’s consumer sentiment index slipped to 48 in October, down from 48.1 in September, bringing it close to historic lows.

However, fashion and luxury businesses are experiencing a different reality. Several major luxury groups continue to describe North America as a bright spot in their latest financial results, reinforcing the US market’s importance to the industry’s growth.

“People express frustration and anger and disappointment — and then they go out and shop,” says Eric Fisch, HSBC’s US head of retail and apparel.

According to Fisch, this disconnect between consumer confidence and actual spending has become increasingly noticeable since the pandemic. It is visible across different price categories, from mass-market retailers to luxury brands.

The US Continues to Support Luxury Growth

Despite expectations that the American market might slow after a strong period of growth, recent financial results suggest that demand remains relatively stable.

Zegna reported a 14% increase in Americas revenue, with executive chairman Ermenegildo “Gildo” Zegna noting that the region maintained double-digit growth despite tougher comparisons with the previous year.

Hermès also recorded strong performance, with Americas revenue rising 8.8% in the third quarter, making it the company’s fastest-growing region.

For Kering, North America was the only region to report growth in the third quarter, increasing 1%. Moncler and Ferragamo also recorded positive results in the market.

Analysts do not expect the upcoming midterm elections to significantly disrupt this momentum. While political campaigns and advertising may temporarily compete with brands for consumer attention, the effect is unlikely to extend into the holiday shopping season.

Neil Saunders, managing director of GlobalData’s retail division, says consumers historically do not allow elections to influence their spending decisions to a significant degree.

Fisch adds that political advertising has crowded the media environment for brands, but expects that pressure to ease as the holidays approach.

The US is becoming even more important as fashion companies navigate uncertainty elsewhere. Economic and political unrest in Europe, alongside continued weakness in the Middle East, has encouraged brands to place greater emphasis on American consumers.

“The US continues to be the growth engine and the opportunity,” Fisch says, noting that many companies are continuing to invest capital in the market.
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The New Normal: Consumer Confidence Versus Actual Spending

The growing gap between how consumers feel about the economy and how they shop has become a defining feature of the post-pandemic retail environment.

Often described as a “vibecession,” the phenomenon reflects widespread economic pessimism, even among people whose personal finances may be relatively stable.

“There has been a growing disconnect between how people say they feel and how they act in terms of spending and buying, including on fashion,” Saunders explains. Despite negative sentiment, consumers have continued to spend more on apparel.

Christine Barton, managing director and senior partner at Boston Consulting Group (BCG), says consumer sentiment often reflects concern for society as a whole rather than an individual’s immediate financial situation.

People may feel comfortable with their own household finances while believing that others are struggling to manage rising living costs.

This distinction helps explain why pessimism has not translated into a significant reduction in fashion spending.

Fisch argues that a more serious slowdown would likely require a sustained decline in household incomes. Although high inflation and slower wage growth have created some pressure in recent months, he does not consider the impact severe enough to significantly change current spending patterns.

For fashion retailers, the outlook remains encouraging. BCG’s recent holiday research found that clothing and footwear are the leading planned Black Friday purchase categories across every generation in the US. Purchase intentions have also increased among all age groups compared with last year.

Shoppers Are Becoming More Selective About Value

Although consumers continue to spend, their approach to purchasing has become more deliberate.

Shoppers are researching products, comparing prices, and considering whether an item offers enough quality to justify its cost.

Saunders says price checking and more extensive product research are among the clearest changes in consumer behavior.

BCG research found that 91% of consumers actively research fashion choices before making a purchase, while 53% identified quality for the price as their biggest consideration when determining value.

Barton says higher prices have not necessarily caused consumers to abandon shopping. Instead, they are placing greater importance on whether a purchase feels worthwhile.

This shift is helping the advanced contemporary fashion segment outperform some higher-priced luxury categories.

Fisch points to brands such as TWP and Harris Tapper, which offer fashionable, high-quality products at prices that remain below those of traditional luxury labels.

He argues that consumers still want desirable fashion, but recent luxury price increases have pushed some shoppers beyond what they are comfortable spending.

BCG’s Center for Consumer Insight research reinforces this trend: 67% of respondents said they would not purchase a product, even if they could afford it, unless they believed it offered strong value.

The message for brands is clear. Product quality, design, and price must work together to convince increasingly cautious shoppers.

Holiday Shopping Could Provide Another Boost

As retailers prepare for the crucial year-end shopping period, analysts expect seasonal promotions to encourage further spending.

According to BCG, 85% of consumers plan to shop during year-end sales events such as Black Friday this year, representing a two-percentage-point increase from 2025.

Clothing and footwear remain the leading planned purchases across every generation.

Barton says recent holiday seasons have demonstrated how consumers sometimes postpone purchases in discretionary categories until major shopping events. Demand for products people want, rather than strictly need, can build up and eventually translate into stronger holiday sales.

For fashion companies, understanding this behavior is essential. Consumers may be worried about the future while remaining willing to spend in the present.

Fisch expects the US to remain a major contributor to industry performance during the fourth quarter, traditionally one of the most important periods for fashion retailers and luxury brands.

“The US is going to drive growth as it has for the prior three quarters,” he says.

Looking Ahead to 2027

Despite economic uncertainty, analysts remain cautiously optimistic about the American fashion market.

Consumer confidence may remain weak, but spending patterns suggest that shoppers are still willing to invest in clothing, footwear, and luxury goods when they see sufficient value.

For brands, the challenge will be balancing desirability with affordability, maintaining product quality, and giving customers compelling reasons to buy.

Fisch sees little in the current outlook to suggest that the US will lose its growth momentum in 2027.

As the holiday season approaches, one thing is becoming increasingly clear: American consumers may be more anxious about the economy, but they have not given up on fashion.