US jewelry revenue rose 3.7% in March and 4.6% in the first quarter of 2025. The increase in jewelry revenue suggested a shift in trend, which may now come to an end due to internal US economic issues, the global tariff war, and the resulting economic volatility.
While jewelry revenue rose, unit sales fell nearly 7% in March. The average retail price of sold items surged 11% year on year, as consumer demand for lower-priced jewelry dropped. This is where the problem arises.
Alarming Indicators
When the US economy begins to falter, people who are most sensitive to economic change instantly tighten their belts and reduce their discretionary income, particularly on jewelry.
As a result, jewelry sales have often functioned as early economic indicators, particularly in the lead-up to a recession. For example, consider the dip in jewelry demand in late 2007, prior to the Great Recession.
Of course, a drop in jewelry demand is also typical of economic downturns or when the cost of components, such as gold, rises dramatically.
We are currently witnessing a very specific shift in demand, which could be a warning sign of a downward economic trend.
Finished Jewelry Revenue Rises
Unit sales of finished jewelry declined 7.4%, however average consumer spend per jewelry item increased 13% year on year, pushing jewelry revenue up 5%.
A cursory look at the table below reveals that the average purchase price was driven higher not by growing product costs or consumers’ desire to spend more, but by a reduction in sales of items priced below $1,500.
What’s particularly troubling is that this is a growing problem. In October 2024, sales of jewelry priced under $250 fell 1%, while sales in most other price points grew. In January, the loss in this price bracket was 6.5%, and in February, the decline spread to jewelry priced below $1,000, decreasing 10.5%.
The bottom price point has already dropped. Where will it stop? This is something the market should consider as jewelry manufacturers begin to plan their year-end holiday designs.
Finished Natural Diamond Jewelry Revenue Declined
When considering the decline in lower price points, this has a significant long-term impact on jewelry revenue, particularly diamond jewelry revenue.
The reduction in unit sales extends to everything priced below $2,500 per item, down 11% year on year.
Except for bangles and anniversary rings, every jewelry subcategory had a drop in unit sales. Finished diamond jewelry revenue fell 7%.
Finished LGD Jewelry Soars
LGD-set finished jewelry mirrored those set with natural diamonds. Unit sales increased by more than 40%, while LGD jewelry revenue grew by just under 40% year on year.
By price point, it’s apparent where diamond jewelry consumers went. Every price bracket below $10,000 increased by double digits in March, with items under $250 gaining the highest.
Sales in almost every jewelry subcategory increased in March. Clearly, as the American customer strives to cut costs, they choose lab-grown diamonds.
Loose Diamonds Remain Mixed
Loose diamonds continue to reveal contradictory stories. Natural diamonds followed general market trends, whereas lab-grown diamonds filled in the gaps where the changing marketplace required something nice but reasonably priced.
Average Natural Diamonds Purchase Price +10%
Loose natural diamonds set by US jewelry shops followed a similar trajectory to completed jewelry. Revenue increased by 3%, driven by a 10% increase in the average diamond spend. The number of diamonds sold has reduced.
Sales of natural diamonds weighing two carats or more increased by double digits, indicating that while lower-priced items are dropping, demand for higher-priced items remains robust.
Another indicator of this is the overall average diamond size sold, which is a record 1.48 carat. We assume that the drop in wholesale pricing is motivating some customers.
In March, retailers’ costs per carat fell by 5% year on year.
Loose Lab-Grown Diamonds Stick to Trends
Prices for loose lab-grown diamonds fell 20.5% in March. This is not entirely consistent with LGD wholesale prices showing a slowdown in declining prices. The slowdown in price depreciation, combined with higher unit sales, resulted in increased revenue from the sale of loose LGD.
The inventory-to-sales ratio is growing, with an average of 8.6:1 in Q1 2025. This means that for every LGD loose stone sold by an American jewelry retailer, they have 8.6 units on hand.
In comparison, in the first quarter of the previous year, the inventory-to-sales ratio was 8.1:1. In prior years, it was considerably lower.
In ordinary circumstances, we would have warned about this buildup. But there is a broader trade perspective. Given Trump’s recent 26% tariff on India (which has since been halted), having a large inventory is beneficial at this time.
Conclusion
The jewelry market was on an upward trend, but there were signs of impending problems. The specter of increased tariffs and even a trade war has rocked the jewelry sector at a critical time. This necessitates measured and cautious action by manufacturers and retailers focused on maintaining their jewelry revenues.
The above high-level figures of the US jewelry revenue and the findings on the bottom retail price range falling out are just the tip of US jewelry market activity we cover. Tenoris has more detailed data that can help improve your business through a better understanding of the US jewelry market. Contact us for a demo.
About Tenoris
Tenoris collects retail sales data from a broad representative sample of US jewelry retailers. Tenoris subscribers include retailers, manufacturers, miners, and financial firms. They use this data to study everything from broad market trends to price prediction, assisting them in identifying changing trends and opportunities ahead of their competitors.
