Consumer Expenditures
Average annual expenditures per consumer unit(1) rose 1.7 percent in 2008 following an increase of 2.6 percent in 2007, according to results from the Consumer Expenditure Survey (CE) released by the Bureau of Labor Statistics of the U.S. Department of Labor. The spending increase was less than the 3.8-percent increase in prices from 2007 to 2008 as measured by the average annual change in the Consumer Price Index (CPI-U). The increase in spending in 2008 was the smallest increase since the 0.3-percent rise in 2003.
Increases in spending for housing (1.1 percent) and food (5.1 percent) were somewhat offset by decreases in spending for transportation (-1.8 percent) and apparel (-4.3 percent) resulting in the small overall increase in 2008. Among the other major components, spending increased for healthcare (4.3 percent), personal insurance and pensions (5.0 percent), and entertainment (5.1 percent).
Consumer Expenditure Survey data include the expenditures and income of consumers, as well as the demographic characteristics of those consumers. Tables with more expenditure detail than is shown in this news release will be available at http://www.bls.gov/cex. Published tables provide 2008 CE data by standard classifications that include income quintile, income class, age of reference person, size of consumer unit, number of earners, composition of consumer unit, region of residence, housing tenure, type of area (urban-rural), race, Hispanic origin, occupation, and education. Other tables available on the website include expenditures by age, region, size, or gender cross-tabulated by income before taxes and other demographic variables. Historical tables back to 1984 and tabulations for selected metropolitan areas are also available. $
Consumer Spending from 1988-2008
A primary use of the Consumer Expenditure Survey data is to measure how consumers allocate their spending among the various components of total expenditures. For example, the 2008 data show that the largest component of consumers’ budgets is housing, which accounts for about a third of overall spending. Another use of the CE data is to look at how spending patterns change over time. Table B shows how the amounts spent for selected expenditure components changed over the 20-year period from 1988 to 2008, in nominal dollars. As prices and incomes generally rise over time, it is expected that the nominal dollar amounts spent on various components will also increase. However, differences in the rates of price increases (or decreases), shifts in expenditure patterns, and economic conditions such as the recent recessionary period, will all contribute to changes in the amounts that consumers allocate to the spending components. Spending changes include:
• Spending on owned dwellings, a component of housing that includes such items as mortgage interest, property taxes and insurance, and maintenance and repairs, showed a large increase from $2,569 in 1988 to $6,760 in 2008.
• The run-up in gasoline prices is reflected in the rapid rise in expenditures in the last several years.
• Spending on both food and healthcare showed steady increases over the period.
• The amount spent on apparel and services showed very little change over the period, from $1,489 in 1988 to $1,801 in 2008, a reflection of the small increase in clothing prices over the period—just 3.0 percent as measured by the CPI-U. In contrast, the overall CPI-U increased by 82.0 percent over the same period.