MILAN (AP) — Luxury consumers are cautiously resuming purchases of apparel, handbags and cosmetics despite continued geopolitical uncertainty, fueling a likely return to modest growth in the sector this year, the Bain & Company consultancy said Thursday.
After two years of contraction, global sales of personal luxury goods are forecast to grow 2% to 4% in 2026, reaching 365 billion euros to 373 billion euros ($415 billion to $424 billion), up from 358 billion euros last year, Bain said in a semi-annual study. The recovery is expected to be led by the Americas, where some U.S. luxury brands posted first-quarter growth of as much as 15%.
“People are still alive and want to live their better lives,” said co-author Claudia D’Arpizio, a partner at Bain, considered the leading consultancy for luxury goods. “So there is this mega trend of looking for good quality of life, of improving their lives and finding the meaning and living the experiences that is stronger than the fear of the future.”
Following a consumer rebellion over steep price hikes, prices have stabilized with more entry-level offerings, and consumers are returning to the luxury arena, D’Arpizio said. She called it “a healthier situation vis-a-vis two years ago,” but added that brands will continue to have to fight to regain “customer love that has been a little bit broken in the previous years.”
The base-case scenario assumes Middle East conflicts stabilize, local spending helps to offset uneven tourist flows and demand in China gradually improves. Bain’s downside scenario calls for flat growth, while easing geopolitical tensions and accelerated growth in China could lift growth to as much as 6%.
U.S. shoppers were spending on everyday casualwear, jewelry and beauty products, with young consumers under 35 years old fueling sales.
China is forecast to return to growth, helped by online sales of ready-to-wear, while Europe is lagging due largely to a dip in tourism caused by geopolitical tensions. Even Dubai has seen locals return to stores.
“People want to live a normal life, that’s a stronger feeling,” D’Arpizio said.
A model wears a creation from the Dolce & Gabbana Spring/Summer 2027 Men's collection presented in Milan, Italy, Saturday, June 20, 2026. (AP Photo/Nicola Marfisi)
Senate Republicans who were berated by President Donald Trump over opposition to his war in Iran held a late-night vote Wednesday to try to appease him, rejecting a war powers resolution a day after a similar measure passed.
Trump harangued GOP senators face-to-face earlier in the day for allowing a vote to block his war in Iran on Tuesday, further escalating a feud that has diverted GOP efforts to focus on election-year affordability issues.
Also, congressional Democrats called for investigations Wednesday into renovations at the Lincoln Memorial Reflecting Pool, as the ongoing drama over the president’s problem-plagued, $16 million rehabilitation project continued to roil the capital.
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Several tankers made their way out of the Strait of Hormuz on Thursday using a new route promoted by a U.N. maritime agency. Iran has threatened vessels using the path, which runs along the coast of Oman.
The opening of an alternative passage through the vital waterway would relieve pressure on the world economy and remove Iran’s main source of leverage in ongoing talks about the interim deal signed last week with the United States.
Traffic through the strait has increased but is still well below prewar levels. Oil on Thursday briefly dipped below its last prewar price of just under $73 a barrel, a sign that the market believes the situation is improving.
The two sides are still debating terms of the deal — from getting ships through the narrow mouth of the Persian Gulf to the future of Iran’s stockpile of highly enriched uranium.
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The Federal Reserve’s preferred inflation gauge rose to a new three-year high in May as gas prices peaked, a sign rising costs could pose political problems for President Trump as midterm elections near.
The Commerce Department said Thursday that consumer prices rose 4.1% in May from a year earlier, the largest annual increase since April 2023. On a monthly basis, inflation was 0.4% last month, matching April’s increase and down from 0.7% in March.
The increase was largely driven by more expensive gas, as well as pricier semiconductors and other computer equipment that are in high demand for the AI buildout. Rising prices have caused the inflation-fighters at the Federal Reserve to keep their key rate unchanged this year, a reversal from January when they had penciled in two cuts. Some economists forecast the central bank could lift rates this year instead.
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Congressional Democrats called for investigations Wednesday into renovations at the Lincoln Memorial Reflecting Pool, as the ongoing drama over the president’s problem-plagued, $16 million rehabilitation project continued to roil the capital.
Lawmakers in the House and Senate demanded answers about the saga that’s been highlighted in the news cycle for weeks, even as the White House has repeatedly blamed — without evidence — unidentified vandals for peeling paint and other problems. Six people have been arrested, President Donald Trump said, without providing details, and a local wildlife nonprofit conducted necropsies on dead ducks found near the Reflecting Pool. The president has said the pool may need to be drained once again for additional repairs.
Connecticut Sen. Richard Blumenthal, the top Democrat on the Senate Permanent Subcommittee on Investigations, challenged the Trump administration over no-bid contracts for work on the Reflecting Pool, saying they were awarded to vendors with previous relationships to Trump.
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Senate Republicans who were berated by President Donald Trump over opposition to his war in Iran held a late-night vote Wednesday to try to appease him, rejecting a war powers resolution a day after a similar measure passed.
Trump harangued GOP senators face-to-face earlier in the day for allowing a vote to block his war in Iran on Tuesday, further escalating a feud that has diverted GOP efforts to focus on election-year affordability issues and brought much of the chamber’s business to a halt. He exchanged particularly harsh words with Louisiana Sen. Bill Cassidy, one of four Republicans who had voted with Democrats on the measure.
Hours later, though, Cassidy was invited to receive a personal briefing on the war at the White House from Vice President JD Vance and envoy Steve Witkoff. Cassidy then returned to the Capitol to vote against a separate but nearly identical war powers resolution.
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President Donald Trump stands on stage after speaking at the opening of the Great American State Fair on the National Mall, Wednesday, June 24, 2026, in Washington. (AP Photo/Julia Demaree Nikhinson)
President Donald Trump waves after speaking at the opening of the Great American State Fair on the National Mall, Wednesday, June 24, 2026, in Washington. (AP Photo/Alex Brandon)
