Surprising Trends in American Spending Habits You Need to Know

Consumer spending consistently accounts for about 70% of the U.S. economy. What Americans buy with all of that consumption is divided into two major categories: First, there’s nondiscretionary spending on necessities such as food, medicine, housing, and clothing. Second, there’s discretionary spending, which includes all none𝓀ssenti🐽al goods and services.

The data below provides a reasonably accurate picture of the nation’s amusements and entertainment, 🦋its interests, hobbies, indulgences, and vices.

Key Takeaways

Consumer spending refers to all consumption final goods and services for current personal and household use, and includes both necessities and discretionary purchases.
Consumer spending, on whole, is more than $15 trillion, making up around 70% of the American 澳洲幸运5官方开奖结果体彩网:gross domestic product (GDP).
In 2023, the average expenditure per American was $77,280.
In 2023, the average expenditure per American increased 5.9% year-over-year from 2022.

Consumer Spending: An Overview

In 2023, the average annual expenditures for all consumer units in the United States increased by 5.9%, reaching $77,280, according to the U.S. Bureau of Labor Statistics (BLS). During the same period, the Consumer Pඣrice Index for All Urban Consumers (CPI-U) rose by 4.1% and average income before taxes grew by 8.3%.

The breakdown of these expenditures reveals that housing was the largest component, accounting for 32.9%, followed by transportation at 17%. A number of aggregated categories added up to less than 5% total, including miscellaneous, personal care products and services, alcoholic beverages, tobacco products and smoking supplies, and reading.

Important

As you read through the year-over-year changes, consider how fragile and unique the global economy was in 2021. The year-over-year changes 🔯from 2021 to 2022 marked a unique transition into the post-pandemic world, often yielding results dramatically different from “normal” economic conditions. The 2023 results continued that transition.

Consumer Spending in Specific Categories

♉ Below are the major spending categories the BLS aggregates and tracks statistics on. Note that as of September 2024, the most recent annual data from the BLS covers calendar yea𝐆r 2023. The statistics below cover not only the spending for that year but also the year-over-year change from 2022.

Housing

Housing expenditures surged by 4.7% in 2023, following a 7.4% increase in 2022. Both rented dwellings and owned dwellings saw significant rises, with increases of 7.6% and 5.7%, respectively. The most notable increase in housing-related spending within all major components was observed in “other lodging” (such as short-term accommodations at hotels, motels, resorts, and vacation rentals), with a substantial 11.1% rise.

Transportation

Transportation expenditures saw a 7.1% increase in 2023, down from a 12.2% increase in 2022. This rise was primarily attributed to a surge in public and other transportation spending, which grew by 29.7%. There was also a 23.2% increase in vehicle purchases. On the other hand, gasoline spending experienced a 12.7% decline in 2023, following a 44% increase in 2022.

Fast Fact

Lower gasoline prices were a likely factor in reduced gasoline spending in 2023. Prices at the pump were 43 cents less per gallon than in 2022, due in part to lower crude oil prices and higher gasoline inventories.

Food

Expenditures on food rose by 6.9% in 2023, compared to a 12.7% increase in 2022. This uptick was primarily fueled by an 8.1% increase in spending on food away from home, alongside a 6.1% increase in spending on food at home.

Personal Insurance and Pensions

Spending on personal insurance and pensions surged by 9.3% in 2023, following an 11% increase in 2022. This significant rise was powered by a 9.6% increase in contributions to pensions and Social Security. Spending on life and other personal insurance also saw an increase, by 5.2%.

Entertainment

Expenditures on entertainment took an upturn in 2023, increasing by 5.1% after declining 3.1% in 2022. This resurgence was chiefly driven by a notable 16.4% increase in spending on pets, toys, hobbies, and playground equipment, which is in stark contrast to the 6.3% decrease witnessed in 2022. Expenditures on fees and admissions also saw an increase of 14.2% from 2022 to 2023.

Education

Spending on education saw a 24% increase in 2023, following an 8.9% increase in 2022. All major components within this category showed increases, with the most significant being a 39.2% rise in elementary and high school tuition and 38.6% growth in school supplies, etc., unspecified. Test preparation and tutoring services also saw a 29.6% increase.

Miscellaneous

Miscellaneous expenditures continued to rise, with a 17.3% increase in 2023, following 2.3% growth in 2022. This increase was driven by a 63.5% surge in legal fees. Other miscellaneous expenditures include safety deposit box rental, checking account fees and other bank service charges, credit card memberships, accounting fees, funerals and cemetery lots, union dues and occupational expenses, expenses for other properties, and finance charges other than those for mortgages and vehicles.

Did Any Category of Consumer Spending Decrease in 2023?

Yes, two categories did. Expenditures on cash contributions decreased 13.7% in 2023, after a 14.1% increase in 2022. Cash contributions are cash contributed to people or organizations outside the consumer unit, including alimony and child support payments; care of students away from home; and contributions to religious, educational, charitable, or political organizations. Also, expenditures on tobacco products and smoking supplies decreased slightly, falling 0.3% in 2023 after an 8.8% increase in 2022.

What Is the Consumer Expenditure Survey?

The Consumer Expenditure (CE) Survey is a data report published annually by the U.S. Bureau of Labor Statistics (BLS). It details the average amount of money Americans spend on various goods and services across different categories, thus providing insights into overall consumer spending patterns and trends across different income levels and household demographics. The first such survey began in 1888.

How Does the CPI-U Factor Into the Consumer Expenditure Survey?

The monthly Consumer Price Index for All Urban Consumers (CPI-U) provides the 澳洲幸运5官方开奖结果体彩网:inflation data used to adjust the do𝔉llar values o🌳f consumer spending in the annual Consumer Expenditure Survey. Essentially, it allows the BLS report to reflect the real purchasing power of consumers by accounting for price changes across various goods and services over time, helping to normalize the spending data to a consistent price level.

The CPI-U, also published by the BLS, measures changes in U.S. consumer prices based on a representative 澳洲幸运5官方开奖结果体彩网:basket of goods and services. The term “urban” in the index refers to are♉as around any city or town with a population of at least 10,000. As aಞ result, the CPI-U covers 93% of the U.S. population.

What Is the U.S. Bureau of Labor Statistics?

The U.S. Bureau of Labor Statistics (BLS) is a federal agency that collects and disseminates various data about the U.S. economy and labor market. Its reports include the 澳洲幸运5官方开奖结果体彩网:Consumer Price Index (CPI) and the 澳洲幸运5官方开奖结果体彩网:Producer Price Index (PPI), both of which are considered to be important measures of inflation. The BLS also produces national and regional figures on employment, labor force participation, productivity, and wages, as well as the 澳洲幸运5官💧方开奖结果体彩网:Import and Exꦰport Price Indexes (MXP), which track the price ch🥀anges of goods bought and sold by the U.S.

The Bottom Line

澳洲幸运5官方开奖结果体彩网:Consumer spending and the U.S. economy go hand in hand. When one increases, so does the other. What Americans buy and what percentage of their purchases are spent on nonessentials reflects their interests, habits, and vices. 澳洲幸运5官方开奖结果体彩网:What America buys, therefore, is an eco♚nomic self-portrait of the average American consumer.

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