A K-shaped U.S. economy—where wealth continues to concentrate at the top while the bottom half struggles—is leaving its mark on American businesses, with luxury and high-end discretionary spending rebounding even as mass-market consumption weakens and consumer sentiment plummets to recessionary levels.

According to Bank of America card data, U.S. luxury spending rose 4% year-over-year in October, a five percentage point improvement from the third quarter's 1% contraction. Jewelry spending was especially strong, accelerating from 10% in the previous quarter to 16% last month—the highest growth rate across all tracked categories.

In a note shared Thursday, Ashley Wallace, analyst at Bank of America, said October showed clear "green shoots" in U.S. luxury spending, adding that “almost all data points improved on a 1-year and 2-year basis.”

October's improvement was visible across both soft luxury and jewelry. Overall, American luxury revenues in the third quarter climbed 5% year-over-year, outperforming other global regions and improving from the second quarter's 1%.

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