How much and on what do American households spend money each year?The answers to these questions can be found in the Consumer Expenditure Survey, which have been to include the results from 2023. In this article, we’ll visualize that spending data and present its historic trends, which now spans the last four decades.Let’s start with some background. Starting in 1984, the U.S. Bureau of Labor Statistics conducts multiple surveys each year to capture the spending of American “”, the affectionate nickname the BLS’ data jocks apply to what is pretty close to, but isn’t quite, American households. In addition to describing how much and on what they spend money on, the results of the Consumer Expenditures surveys are used to determine the weighting of various consumer spending categories within the (CPI), the most commonly cited measure of inflation for the U.S. economy.Because the data is used this way, it’s important to track how the composition of consumer spending changes over time. For example, because the Affordable Care Act of 2010 (ACA) , changes in the cost of health insurance has a bigger effect on consumer price inflation today than they did before the ACA was passed. Meanwhile, the amount that Americans spending on apparel has declined over time, so changes in apparel prices have a smaller effect on the consumer price index than what they had in the 1980s.Our presents the average annual amount of consumer expenditures by American “consumer unit” households for each year from 1984 through 2023.These figures represent the nominal, or non-inflation adjusted, total average consumer spending in each year. Starting in 2021, the amount the average American household consumer units has risen sharply because of the high inflation during this period, which has boosted household consumer spending from 2020’s $61,334 to 2023’s $77,280.The breaks out that spending into major expenditure categories, such as housing, transportation, food, life insurance & pension savings & Social Security, health insurance & medical expenses, entertainment, charitable contributions, apparel & other products, and education, to put them in order from highest to lowest:This chart verifies the amount of spending is up in nearly every major consumer expenditure category, with housing, transportation, and food seeing some of the fastest escalation from 2021 through 2023. Only the elective categories of charitable contributions and entertainment have seen decreases during these years.The reveals the trends for these categories, showing how their individual share of total average annual consumer expenditures has been changing since 1984.The puts all these changing trends together. The major categories of consumer spending that have had a falling share of total consumer spending over time are shown in shades of green, those claiming a rising share over time are shown in shades of purple.If you want to know specifically how spending on these major categories of consumer spending have changed since last year, we’ll close with the following excerpt from the BLS’ for 2023’s consumer expenditures (boldface emphasis ours).
Selected spending patterns, 2023
- Housing expenditures (32.9 percent of total expenditures) increased 4.7 percent in 2023, after a 7.4-percent increase in 2022. Expenditures on rented dwellings and owned dwellings both increased, by 7.6 percent and 5.7 percent, respectively. (For more information on how owned dwellings are defined see the methodology section.) Other lodging also increased 11.1 percent in this same period.
- Transportation expenditures (17.0 percent of total expenditures) increased 7.1 percent in 2023, after an increase of 12.2 percent in 2022. This increase was driven by a large increase in public and other transportation spending (+29.7 percent), followed by a 23.2-percent increase in vehicle purchases (net outlay). (For more information on how net outlay is defined see the methodology section.) In contrast, partially offsetting the increase in total transportation expenditures, gasoline spending was down 12.7 percent in 2023, after a 44.0 percent increase in 2022.
- Spending on food (12.9 percent of total expenditures) increased 6.9 percent in 2023, compared to an increase of 12.7 percent in 2022. Increases in both food at home (+6.1 percent) and food away from home (+8.1 percent) led to this increase in overall food spending.
- Personal insurance and pensions spending (12.4 percent of total expenditures) increased 9.3 percent in 2023, after increasing 11.0 percent in 2022. A 9.6-percent increase in contributions to pensions and Social Security largely contributed to this increase. Within contributions to pensions and Social Security, there was a 16.8-percent increase in deductions for private pensions, as well as a 13.3-percent increase in contributions to retirement plans (such as 401(k)s or Individual Retirement Accounts). At the same time, spending on life and other personal insurance increased by 5.2 percent.
- Spending on cash contributions (3.1 percent of total expenditures) decreased by 13.7 percent in 2023, after a 14.1-percent increase in 2022. Cash contributions comprise cash contributed to persons 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.
- Education expenditures (2.1 percent of total expenditures) increased 24.0 percent in 2023, after rising 8.9 percent in 2022. This increase was driven by a 39.2-percent increase in elementary and high school tuition, after being unchanged from 2021 to 2022. The categories of test preparation and tutoring services (+29.6 percent) and school supplies, etc., unspecified (+38.6 percent) also contributed to this increase.
- Spending on miscellaneous expenditures (1.5 percent of total expenditures) increased 17.3 percent in 2023, after an increase of 2.3 percent in 2022, mainly due to a 63.5-percent increase in legal fees. In addition to these fees, miscellaneous expenditures include safety deposit box rental, checking account fees and other bank service charges, credit card memberships, accounting fees, funerals, cemetery lots, union dues, occupational expenses, expenses for other properties, and finance charges other than those for mortgages and vehicles.
The data confirms American consumers experienced the fastest growth in inflation of the last 40 years in the years from 2021 through 2023.ReferencesU.S. Bureau of Labor Statistics. Consumer Expenditure Survey. Multiyear Tables. [PDF Documents: , , , , . Excel spreadsheet: ]. Reference URL: https://www.bls.gov/cex/home.htm. 25 September 2024. More By This Author:Teen Employment Rebounds After Three Months Of Declines Rising Dividend Outlook Boosting Stock PricesSeptember 2024 Snapshot Of Who Owns The U.S. National Debt
