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updated 1/11/2011 3:33:09 PM ET 2011-01-11T20:33:09

The rich treated themselves like royalty this holiday season. That spun the holidays into gold for Tiffany & Co. and other high-end retailers.

Wealthier shoppers traded up to more expensive gold and diamond jewelry from silver charms at Tiffany. At Saks and Neiman Marcus designer clothing and handbags were the hot holiday items.

The strong reports are a big improvement from six months ago, when wealthy Americans got spooked by a stock market slide and cut back spending. It shows affluent shoppers are trading back up to higher-status brands as the stock market bounces back. The rich in booming Asian economies, especially, are ramping up spending.

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On Tuesday, Tiffany & Co. raised its outlook for the year because of better-than-expected holiday sales, and noted particular strength in more expensive fine jewelry and diamond rings.

Revenue at stores open at least a year rose 7 percent in the U.S. and was even stronger in Asia, rising 15 percent. That's a key measure of a retailer's health because it excludes the effects of stores that open or close during the year.

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The jeweler's report backs up strong December sales reports from pricey department stores Saks Inc., Neiman Marcus and Nordstrom. All reported significantly higher revenue than a year ago.

Upper-income shoppers splurged, particularly during the last week before Christmas, a Gallup poll showed. Average daily spending reported by upper-income shoppers rose 45 percent to $183 during the week ending Dec. 26. For all shoppers, the figure rose only 18 percent to $85 that week. Luxury sales were helped by many well-heeled customers buying gifts for themselves, analysts said.

That was true for Ariane Sommer, 33, a model and author from Los Angeles, who bought a ring for herself at Italian jeweler Damiani in December.

"I am not only going to treat my friends and family, but I'm also going to treat myself," she said, adding she hadn't bought herself anything special in more than two years.

"This holiday season, it was a little bit of one for you; two for me," luxury consultant Robert Burke said.

That shift helped luxury spending, excluding jewelry, rise 8.5 percent from Nov. 28-Jan. 1 compared with a year ago, adding to a 5.5 percent increase last year, according to MasterCard Advisors' SpendingPulse, which tracks all transactions including from cash. Jewelry sales rose 10.4 percent.

Both figures are still below their pre-recession peaks. Luxury sales are 6.9 percent below pre-recession levels, while jewelry is 8.9 percent below. But the momentum bodes well for 2011.

The Dow Jones Industrial Average is up 19 percent since the beginning of July,_The return of bonuses on Wall Street and elsewhere also have helped the wealthy feel better about more conspicuous consumption, said John Lonski, chief economist of Moody's Capital Markets Research Group.

"Financially speaking, wealthy Americans much better withstood the latest downturn than have lower-income Americans," he said. "There was a drop-off there for a while, but it seems as though they've rebounded quite nicely."

That doesn't offer much solace to lower-income Americans, who are still facing a housing slump and high unemployment. But it is good news for the economy, because the richest 5 percent of Americans, those making at least $207,000 annually, account for about 14 percent of all spending. And spending accounts for about 70 percent of the economy.

"What you would like to see is consumer spending improvement distributed more broadly," Lonski said. "The lower- to middle-income segment of the population, after bearing brunt of the slump, is lagging behind rest of economy."

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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