(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

HENRYs purchased $14,241 worth of luxury goods on average across 22 categories in the first quarter, up about $2,400 from the same period in 2009, according to Unity Marketing's data. The wealthiest consumers spent $56,534, about $16,000 more.

The highest-income shoppers are insulated from rising food and fuel prices by gains in their financial portfolios, said David Schick, an analyst at Stifel Nicolaus & Co. in Baltimore.

The Standard & Poor's 500 Index has climbed 96% since reaching an almost 13-year low on March 9, 2009, at the depths of the recession.

The S&P Retail Exchange-Traded Fund has risen by 49% since Dec. 31, 2009, while the S&P 500 ETF has increased 20% over the same time period.

Revenue for luxury retailers like Coach and Tiffany & Co. is growing because their primary customer base can still afford to splurge even as it costs more to buy groceries and fill gas tanks, Schick said.

'De-Linking'

"Very robust sales numbers for Coach and Tiffany's show that de-linking, where food and fuel inflation is just not as significant," he said.

Net sales for Coach increased 14% in the quarter ended April 2 from the same time last year, while Tiffany's worldwide net rose 12% in the period ended Jan. 31.

Handbag sales at different price points for New York-based Coach show "bifurcation" within its customer base, according to Daniela Nedialkova, an analyst with Atlantic Equities LLP in London. Coach's most expensive purses, priced at $400 or more, contributed 18% to net sales in the third quarter, up from 10% the prior year, she said.

At Nordstrom Inc., more expensive merchandise has outperformed the rest of the store, increasing the company's average price point, Erik Nordstrom, the Seattle-based department store's executive vice president, said in a May 12 conference call with analysts.

No Discounts

Full-price selling for Nordstrom is now back at pre-recession levels, Nedialkova wrote in a May 13 report.

Car sales also indicate more resilience among the wealthiest consumers, according to data collected by Schick of Stifel Nicolaus. Unit purchases of "ultra-luxury" cars like a Maserati, which costs more than $85,000, climbed 24% in April from last year. Demand for "luxury" autos like Acuras that cost between $35,000 and $85,000 rose 9%.

Delaying the purchase of a new vehicle was just one sacrifice HENRYs made after overextending themselves in the past, PNC's Dye said.

"This is a different type of market where consumers can't spend ahead of themselves," leading to a tenuous economic recovery, Dye said. "We're seeing a consumer who can keep pace with the economy right now, but really can't drive the economy forward."