Luxury spending shows who's doing well

NEW YORK, Oct. 27 (UPI) -- A breakdown in spending shows a widening gap between U.S. consumers doing well and those doing poorly, an economist said.

With stock markets up for the past two months, wealthier Americans are beginning to spend on luxury items, USA Today reported Wednesday. But spending on basic items remains in a slump, showing the "have-nots" have not recovered from the recession that officially ended more than a year ago.

"The rising tide isn't lifting all boats," said Carl Steidtmann, chief economist at accounting and consulting firm Deloitte.

Consumer spending overall rose 1.4 percent in the January through August, compared with the first eight months of 2009. But consumers are spending less this year on prescription medicines and more on high-tech televisions, the newspaper said.

Spending on pets shows a split within that sector alone. Spending on organic pet food is up, but low-cost pet food is also doing well. "People are cutting back on themselves more than they're cutting back on pets," said Bob Vetere, president of the American Pet Products Association.