The 10 Most Relevant Consumer Spending Statistics
Considered by many economists to be the most important short-run determinant of economic performance, consumer spending is the driving force behind the U.S. economy. It encompasses all individual and household purchases of services and goods. In the ideal economy, it should be equal to aggregate economic output.
When analyzing consumer spending statistics, it’s important to understand that there are five different determinants of consumer spending that influence the economy. The biggest and most important of these are disposable income and household debt. Next come interest rates, consumer confidence, and credit supply. Combined, these five factors can dictate how a country’s entire economy performs.
From inflation to deflation, consumer spending reflects the state of the economy in the US It holds the economy back when consumer trust is low and pushes it forward during periods of prosperity. Ever since the official end of the Great Recession in 2012, consumer spending data has indicated that the economy is recovering.
Top Consumer Spending Figures - Editor’s Choice for 2024
- Consumer spending makes up about 70% of economic activity in the United States.
- Consumer spending in the US is up 5% compared to 2022.
- The average American household spends 33.3% of its income on housing.
- The median household income after taxes in 2023 is $64,240.
- On average, consumers in the bottom 60% of earners spend more than they earn.
US consumer spending on home entertainment reached $36.6 billion by the end of 2022.
After hitting a 12-year low in 2014, the amount US consumers spend on home entertainment has risen steadily with each subsequent year. This increase can be attributed primarily to the rise of streaming services like Netflix, Max, Disney+, Hulu, and Amazon Prime. In 2022 alone, the overall consumer spending on digital entertainment rose by 11% compared to the year before.
The average American household spends 33.3% of its income on housing.
(United States Bureau of Labor)
The latest data shows that money spent on housing still represents the biggest expense for most consumers. In fact, housing expenses rose to an average of $24,298 annually in the 2023 report by the U.S Bureau of Labor. Transport comes in second place, but represents only 14.6% of yearly household expenditure, followed by food at 11.8%. The same government data indicates that over a two-year period, housing expenditure rose by an average of around $2,000.
The median household income after taxes is $64,240.
The latest government statistics from 2023 show that the median household income after taxes dropped by 8.8% compared to the year before. In the same period, the poverty rate after taxes increased by a massive 59%, growing to an overall 12.4%.
US consumers spend at least $18,000 per year on non-essential items.
Research into consumer spending indicates that the average American consumer could spend over $1 million on non-essential purchases during his or her lifetime. This means US consumers spend around $1,500 per month on things like eating in restaurants, drinking with friends, rideshare trips, and subscription boxes.
70% of US consumers believe they could be smarter with their money.
Consumer spending statistics like this one show that US citizens at least understand that they aren’t being wise with their spending. However, about 24% of consumers also concede that they don’t have a budget. This shows that there is a long way to go from acknowledging the issue to actually resolving it.
On average, Americans make five impulse purchases every month.
A survey on consumer spending trends found that these purchases amount to $109 per month. Despite this, 58% of consumers feel like they don’t have enough money to afford more important things, or indeed to put money aside in the form of long-term savings.
The average consumer in the bottom 60% of earners spends more than he or she earns.
(United States Bureau of Labor)
The same research on consumer spending by income level from the Bureau of Labor Statistics shows that serious over-spending is a problem for consumers younger than 25 and older than 65. In general, American citizens tend to spend more than they earn, which is why managing your funds properly is more important than ever.
Consumer spending makes up about 70% of economic activity in the United States.
Government data on consumer spending shows without doubt that it is the biggest driving factor behind the US economy, especially during economic recoveries like that of the past decade. The Great Recession of 2008 put a lot of pressure on US citizens, but the increase in consumer spending over the past couple of years indicates that the economy has fully recovered.
Consumer spending in the US is up 5% from 2022.
(Bureau of Economic Analysis)
The latest statistics on US consumer spending from 2023 show the upward trend in motion is likely to continue throughout the next few years, even though the inflation and economic worry is slowing down the overall spending.
Healthcare expenditure in 2023 is expected to reach $4.7 trillion.
(Peter G. Peterson Foundation)
The newest consumer spending data shows that healthcare costs now represent 18% of the national economy, more than double the average of other wealthy countries.
When considering all the available US consumption data from the past couple of years, we can come to a few key conclusions. The first is that there’s an obvious correlation between consumer expenditure and GDP growth. Secondly, it’s clear that Americans spend a lot of money on non-essential purchases, even though this number has been dropping since 2022.
And thirdly, we can see that household income is rising, although perhaps not at the rate it needs to.
The importance of consumer spending for the US economy has long been debated, with some people arguing that savings and business investment are more crucial for growth.
At a time of crisis, however, there’s no doubt that personal consumption expenditures help economies get back on their feet, and the most recent global financial crisis has shown just that.
I have always thought of myself as a writer, but I began my career as a data operator with a large fintech firm. This position proved invaluable for learning how banks and other financial institutions operate. Daily correspondence with banking experts gave me insight into the systems and policies that power the economy. When I got the chance to translate my experience into words, I gladly joined the smart, enthusiastic Fortunly team.