{"id":29021,"date":"2024-12-16T12:25:43","date_gmt":"2024-12-16T06:55:43","guid":{"rendered":"https:\/\/gjepc.org\/solitaire\/?p=29021"},"modified":"2025-01-16T13:16:10","modified_gmt":"2025-01-16T07:46:10","slug":"u-s-diamond-demand-poised-for-growth-in-2025-amidst-easier-comps","status":"publish","type":"post","link":"https:\/\/gjepc.org\/solitaire\/u-s-diamond-demand-poised-for-growth-in-2025-amidst-easier-comps\/","title":{"rendered":"U.S. Diamond Demand Poised for Growth in 2025 Amidst Easier Comps"},"content":{"rendered":"

The U.S. diamond market is set to experience a rebound in 2025, driven by easier year-over-year comparisons and a more favourable macroeconomic backdrop, notes diamond analyst Paul Zimnisky<\/strong>.<\/em><\/p>\n

The U.S. economy, which is estimated to represent upwards of 55% of global diamond jewellery demand, is forecast to decelerate on gross domestic product growth rate basis next year. Historically, productivity growth has correlated well with diamond jewellery demand over the longer term.<\/p>\n

An average of forecasts from the International Monetary Fund (IMF), World Bank and The Organisation for Economic Co-operation and Development (OECD) point to the U.S. economy growing at 2.2% in 2025, which would be down from an estimated 2.8% in 2024 and 2.9% in 2023.<\/p>\n

In October, the IMF said it expects U.S. growth to slow due in part to tighter fiscal policy and a \u201ccooling labour market.\u201d However, recent U.S. election results are likely to further shuffle macroeconomic variables next year.<\/p>\n

In November, the Republicans, led by Donald Trump, won the White House, Senate and House of Representatives, giving the party a majority across U.S. government branches (the Democrats held similar control as recently as 2022).<\/p>\n

Trump has conspicuously touted a protectionist agenda when he takes office in January, including plans for stricter immigration enforcement and an aggressive tariff strategy. Both measures are theoretically inflationary \u2013 at least in the shorter term. On the other hand, Trump plans for easier domestic energy policy and an overall reduction in excess government spending which could be deemed as more deflationary in nature.<\/p>\n

The U.S. Federal Reserve Bank, which sets interest rate targets with a mandate of balancing inflation and employment, cut rates in November by 0.25% marking the second consecutive cut following a generationally aggressive sequence of hikes in 2022 and 2023 to combat post-pandemic inflation \u2013 which brought rates from essentially zero to 5.5%. The Fed Funds futures market is implying additional cuts totalling 1% (yielding a Fed Funds target rate of 3.7%) by the end of 2025, which would roughly put rates in line with inflation projections, i.e. equating to a real interest rate of zero (which can be interpretated as a return to more normal policy).<\/p>\n

As it stands, people in the U.S. are working as the unemployment rate sits at a healthy 4.0% \u2013 despite moderately creeping up from about 3.5% over the last year. Inflation is around 3% \u2013 down significantly from the high-water mark of 7% in 2021. Consequently, consumer sentiment in the U.S. \u2013 especially from the base that buys jewellery \u2013 is generally good, which could be bolstered further by stock and crypto markets that are at all-time highs heading into 2025.<\/p>\n

\"\"
Paul Zimnisky speaking at the Bharat Diamond Bourse in Mumbai in October 2024.<\/figcaption><\/figure>\n

Diamond jewellery sales in the U.S. will be down an estimated mid-single digit percentage in 2024 which is on top of a high-single digit decline in 2023 \u2013 in essence setting up easier comparables in 2025. Further, many jewellers have worked through excess inventory (which was marked at high prices) over the last two years, which will ostensibly result in a less promotional environment in 2025 \u2013 which could further benefit industry sentiment.<\/p>\n

In addition, a tailwind driven by a post-pandemic engagement\/bridal recovery remains a variable at play. In recent weeks, public retailers including Signet Jewelers and Brilliant Earth have noted a recovery in the category remains intact, albeit if \u201cslower\u201d than initially anticipated. Historically, bridal has represented a third to a half of diamond jewellery demand in the U.S.<\/p>\n

\n

Paul Zimnisky, CFA is an independent diamond industry analyst and consultant based in the New York metro area. For regular in-depth analysis and forecasts of the diamond industry please consider subscribing to his <\/em>State of the Diamond Market<\/em><\/a>, a leading monthly industry report; an index of previous editions can be found <\/em>here<\/em><\/a>. Also, listen to the <\/em>Paul Zimnisky Diamond Analytics Podcast<\/em><\/a> on Spotify or Apple Podcasts for exclusive full-length conversations with special guests from the gem and jewelry industry. Paul is a graduate of the University of Maryland’s Robert H. Smith School of Business with a B.S. in finance and he is a CFA charterholder. He can be followed on X <\/em>@paulzimnisky<\/em><\/a> and on YouTube <\/em>@paulzimnisky<\/em><\/a>.<\/em><\/p>\n

Paul will be speaking at European jewellery show INHORGENTA on February 22, 2025 in Munich. He will also be in Milan and Rome in February 2025 and can be contacted at <\/em>paul@paulzimnisky.com<\/em><\/a> to arrange a meeting. <\/em><\/p>\n

Disclosure: At the time of writing Paul Zimnisky held a long equity position in Brilliant Earth Group and Newmont Corp. Paul is an independent board member of Lipari Diamond Mines, a privately-held Canadian company with an active mine in Brazil and a development-stage asset in Angola. Please read full disclosure at <\/em>www.paulzimnisky.com<\/em><\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The U.S. diamond market is set to experience a rebound in 2025, driven by easier year-over-year comparisons and a more favourable macroeconomic backdrop, notes diamond analyst Paul Zimnisky. The U.S. economy, which is estimated to represent upwards of 55% of global diamond jewellery demand, is forecast to decelerate on gross domestic product growth rate basis…<\/p>\n","protected":false},"author":7,"featured_media":29023,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[107,79],"tags":[],"thb-sponsors":[],"class_list":["post-29021","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retail","category-viewpoint"],"acf":[],"yoast_head":"\nU.S. Diamond Demand Poised for Growth in 2025 Amidst Easier Comps - Diamond jewellery magazine<\/title>\n<meta name=\"description\" content=\"Solitaire International Magazine: Get the best diamond jewellery magazines in India. 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