The results of 2022's Consumer Expenditures surveys have been released and it once again falls to us to visualize its historic trends.
Starting in 1984, the U.S. Bureau of Labor Statistics conducts multiple surveys each year to capture the spending of American "consumer units", 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 Consumer Price Index (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) made health insurance much more costly, 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.
Having set that background, our first chart presents the average annual amount of consumer expenditures by American "consumer unit" households for each year from 1984 through 2022.
These figures represent the nominal, or non-inflation adjusted, total average consumer spending in each year. The next chart 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:
The third chart reveals the trends for these categories, showing how their individual share of total average annual consumer expenditures has been changing since 1984.
The final chart 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' press release for 2022's consumer expenditures (boldface emphasis ours).
Selected spending patterns, 2022
- Housing expenditures increased 7.4 percent in 2022, after a 5.6-percent increase in 2021. Expenditures on both rented dwellings and owned dwellings increased by 6.5 percent and 8.4 percent, respectively. (For more information on how owned dwellings is defined see the methodology section). The largest housing-related spending increase in all major components of housing was in other lodging, up 30.9 percent, due largely in part to a 38.6-percent increase in lodging on out of town trips.
- Transportation expenditures increased 12.2 percent in 2022, after an increase of 11.6 percent in 2021. This increase was driven by the component category public and other transportation spending (+86.9 percent), followed by a 45.3-percent increase in gasoline, other fuels, and motor oil. Average expenditures for vehicle purchases (net outlay) were down 6.9 percent in 2022, after a 6.7-percent increase in 2021. A net outlay is defined as the household's total payment or purchase amount of a good or service minus any reimbursements. A net outlay is commonly referred to as the total out of pocket spending. Vehicle purchases (net outlay) includes the purchase price minus trade-in value on new and used domestic and imported cars and trucks and other vehicles, such as motorcycles.
- Spending on food increased 12.7 percent in 2022, compared to an increase of 13.4 percent in 2021. The increase was driven by food away from home spending, up 20.1 percent, accompanied by an increase in food at home spending, up 8.4 percent. Expenditures for food away from home in 2022 exceeded 2019 levels, marking the first time since the onset of the COVID-19 pandemic that this has happened.
- Personal insurance and pensions spending increased 11.0 percent in 2022, after increasing 8.7 percent in 2021. This was driven by an 11.1-percent increase in contributions to pensions and Social Security. Within contributions to pensions and Social Security, there was a 28.8-percent increase in expenditures on non-payroll deposits to retirement plans. At the same time, spending on life and other personal insurance increased by 9.7 percent.
- Entertainment expenditures decreased 3.1 percent in 2022, after exhibiting an increase of 22.7 percent in 2021. This decrease was driven by a 24.5-percent decrease in other entertainment supplies, equipment, and services expenditures, which contrasts with the 60.6-percent increase in 2021. Toys, hobbies, and playground equipment also decreased from 2021 to 2022 (-16.1 percent). Although there was a 27.4-percent increase on fees and admissions, this was offset by the previously stated declines.
- Spending on cash contributions increased 14.1 percent in 2022, after a 5.8-percent increase in 2021. This increase in 2022 was driven by a 36.3-percent increase in other cash gifts.(2) Cash contributions includes 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.
- Spending on apparel and services increased 10.9 percent in 2022, after an increase of 22.3 percent in 2021. All major components of apparel and services exhibited increases, the largest being an 18.8-percent increase in footwear. With this 10.9-percent growth in apparel and services, spending has surpassed 2019 levels, before the COVID-19 pandemic.
- Personal care products and services increased 12.3 percent in 2022, which follows the large increase of 19.3 percent from 2021. Personal care products increased by 15.5 percent after a 1.0-percent decrease in 2021. Personal care services increased by 9.1 percent, particularly notable since this follows the 50.4-percent rise from 2021.
The data confirms American consumers experienced considerable inflation during both 2021 and 2022.
References
U.S. Bureau of Labor Statistics. Consumer Expenditure Survey. Multiyear Tables. [PDF Documents: 1984-1991, 1992-1999, 2000-2005, 2006-2012, 2013-2020, 2021-2022]. Reference URL: https://www.bls.gov/cex/home.htm. 8 September 2023.