(Bloomberg News) The nearly rich aren't spending nearly as much as the wealthiest Americans on luxury brands.

Those earning from $100,000 to $249,999 a year spent 20% more in the first quarter on items from Honda Motor Co. Acuras to Coach Inc. handbags compared with the same period in 2009, according to figures from Unity Marketing Inc. Demand for Fiat SpA Maseratis and Coach's top-end purses propelled a 41% increase by those making even more.

The nearly rich are being constrained by falling home prices, income gains that lag behind inflation, 9% unemployment and a reluctance to dip into savings after the recession, according to economist Robert Dye. That helps explain why the Federal Reserve will be inclined to keep monetary policy accommodative, he said.

"The durability of the spending of this very important group is a key factor in judging whether the economy has transitioned from a government-aided recovery into a self- sustaining expansion," said Dye, a senior economist at PNC Financial Services Group Inc. in Pittsburgh.

The housing crisis and recession took a toll on these households, said Pam Danziger, president of Unity Marketing, a Stevens, Pennsylvania-based company that tracks luxury spending. These consumers -- Danziger calls them HENRYs, or high earners not rich yet -- still feel financially vulnerable, she said.

"In 2006-2007, this group was really spending their perceived wealth, and now they are spending their real income," Danziger said. "They're behaving in a middle-class sort of way, and the smart thing to do is to cut off indulgences quickly."

Share Of Spending

HENRYs' curbed shopping habits are limiting the pace of the recovery, said Danziger. While they make up about 18% of all households, they account for about 40% of consumer spending when combined with the 2% of the population in the ultra-affluent group.

The unemployment rate was 9% in April, compared with an average 5.3% during the economic expansion that ended in December 2007, according to the Labor Department. It reached a 26-year high of 10.1% in October 2009.

Home values in 20 U.S. cities were down 33% in February from the record reached in July 2006, according to figures from S&P/Case-Shiller.

Even as the labor market improves, the weak housing market and high oil prices are among factors "holding the recovery back," Fed Chairman Ben S. Bernanke said April 27 in his first regular press conference. "The substantial ongoing slack in the labor market and the relatively slow pace of improvement remain important reasons that the Committee continues to maintain a highly accommodative monetary policy."

Smaller Gains