As diamond prices have been crashing for the last year and a half, diamond deflation has arrived with a bang, with levels not seen since early COVID before government stimulus checks were handed out. This crash is an indicator of a luxury spending bust — a “luxury recession” which was predicted by Barclays in December as imminent. Also, luxury watches, including Rolex, have plunged. The Diamond Index via International Diamond Exchange (IDEX) soared in value in March 2020 with a 36 percent upswing, but prices have plunged 24 percent. Diamond deflation is most likely due to consumers no longer being flush with stimulus checks, as well as two years of negative wage growth, depleted personal savings, and mounting credit card debt under the highest interest rates in years. In summary, consumer retreat is an early indicator of an economic downturn that potentially could materialize late 2023 or early 2024.