The aftershocks of the coronavirus pandemic continue to roil the U.S. economy, and Signet Jewelers shared some surprising news this week: The company is selling fewer engagement rings this year because, it says, singles stuck at home during the lockdown didn’t get their wishes fulfilled. – be engaged in 2020.

“As we predicted, there were fewer engagements in the quarter as a result of the disruption of dating by Covid three years ago,” Virginia C. Drosos, chief executive of Signet, which owns Kay Jewelers and Zales, told investors on Thursday. Shares in Signet, the largest jewelry retailer in the United States, fell after the company cut its sales and profit forecasts for the rest of the year.

In a way, the engagement ring has become a sparkling microcosm of the American economy. The bridal jewelry business is plagued by the lingering effects of the pandemic, rapid inflation that is squeezing consumers and a growing sense of nervousness among shoppers.

Some of the volatility is purely due to the pandemic. Weddings were canceled in droves during the 2020 lockdown, but have bounced back starting in late 2021 and through 2022 and were expected to level off in subsequent years as more typical patterns return. Wedding-related activity appears to be showing some early signs of slowing in 2023, but it’s unclear whether this is the result of a dry dating period in 2020, according to Signet, or simply a return to a long-term shift toward later and fewer weddings.

what is clear Wedding trends are also tied to broader and potentially longer-term economic forces. Signet may be selling less because fewer people are getting down on one knee, but also because ring buyers are becoming more cautious and spending less in a time of rapid inflation and growth uncertainty about the direction of the economy. Both the volume and value of jewelry sold by Signet fell last quarter.

Ms. Drosos said the company “expected the low double-digit decline in orders we saw this quarter,” but that there were other factors at play. “Recent consumer confidence, lower tax refunds, economic concerns triggered by regional bank failures and continued inflation have led to a weaker spending trend across the jewelery industry,” she added.

Consumers are facing big challenges this year. Prices have risen by about 15 percent cumulatively over the past three years, as measured by the personal consumption expenditure index. Inflation has slowed in recent months, but many workers are finding their wages falling.

The Federal Reserve raises interest rates to try to cool the economy and combat stubborn price increases. In addition to making it more expensive for consumers to buy on credit or take out loans, rate movements have increased the chance that the economy could slip into recession.

As many households watch their savings dwindle and worry about job security, they may be less willing to splurge on big things like fancy diamond rings and custom wedding dresses.

David’s bridewedding dress retailer, indicated in a bankruptcy filing this year that some brides are becoming more budget-conscious.

“More and more brides are opting for less traditional wedding attire, including modest wedding dresses,” said CEO James Marcum. submission to court.

Like most of the economy, the wedding industry is showing signs of a split, as higher-income earners find they can tap into their savings and spend, and lower-income families spend more of their earnings on necessities like food. they begin to crack under the weight of inflation.

The announcement was made by LVMH, the luxury retail group that owns jewelers including Tiffany continued growth in early 2023, including solid jewelry sales.

“Everyone expected 2023 to be a terrible year for luxury in the US,” Jean-Jacques Guiony, LVMH’s chief financial officer, told investors in April, explaining that a collapse had not occurred. “It’s normalizing, but it’s not bad either.”

But at more mainstream brands like Kay and Zales, customers may start pulling away.

“We’ve started to see a softening at the higher price points that were relatively isolated before, and the lower price points have remained under pressure,” Joan Hilson, Signet’s chief financial officer, said on Thursday’s call.

Signet hopes demand for wedding rings will rebound: It predicts 500,000 more engagements from 2024 to 2026 than the pre-pandemic trend would suggest, as dating delayed by lockdowns leads to matches. But analysts at Bank of America are “concerned that some of this rebound will be offset” by a “squeezed consumer” spending less on jewelry, they wrote.

Shane McMurray, founder of the Wedding Report, is skeptical of the year’s big drop in engagements. It expects the number of weddings to fall 20 percent in 2023 from 2022 levels as trends return to normal. And Lyman Stone, director of research at consultancy Demographic Intelligence, agreed that the current slowdown in weddings may reflect a return to previous trends rather than a one-off slowdown.

“It looks like 2023 is going to be a low year,” he said. “I think the shifting of blame for the 2020 lockout is a bit of a stretch.

He produced the sound Tally Abecassis.

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