WASHINGTON (Sept. 26, 2012) — Consumer spending rose 3.3 percent in 2011 following a decrease of 2 percent in 2010, the U.S. Bureau of Labor Statistics reported Tuesday.
The rise in spending in 2011 barely outpaced the 3.2-percent increase in prices for goods and services from 2010 to 2011, as measured by the average annual change in the Consumer Price Index (CPI-U). This was the first yearly increase in consumer spending since the 1.7-percent rise from 2007 to 2008, as expenditures had declined in both 2009 and 2010.
All major components of household spending increased in 2011. The 8 percent rise in transportation spending was the largest percentage increase among all major components. Overall spending on food and cash contributions (including payments for support of college students, alimony and child support, and giving to charities and religious organizations) both increased by 5.4 percent. Other spending highlights include a 4.9-percent rise in healthcare spending, and modest increases in housing (+1.5 percent), apparel and services (+2.4 percent), entertainment (+2.7 percent), and personal insurance and pensions (+0.9 percent).
Spending by selected demographics
Consumer Expenditure Survey (CE) data measure how consumers allocate their spending among the various components of total expenditures. For example, the table below compares the share allocated to selected expenditures by income quintiles. The lowest income quintile allocated more money to food and housing than the other quintile groups. The highest income group allocated more money to personal insurance and pensions (including payments for life insurance, other non-health insurance, pensions and Social Security) than any other group. No clear trend existed for the share allocated to transportation and healthcare among the income quintile groups.
Spending patterns, 2009-2011
Table C shows amounts spent for selected expenditure components over the 3-year period from 2009 to 2011. Spending changes included:
• Mortgage interest and charges for owned homes, a subcomponent of housing, fell from $3,594 in 2009 to $3,184 in 2011.
• Natural gas expenditures fell from $483 in 2009 to $420 in 2011, a 13.0-percent decrease.
• Expenditures on gasoline and motor oil increased 33.7 percent in 2011, with a 24.5-percent increase from 2010 to 2011. The spending increase can partly be explained by the yearly rise in the price of gasoline during 2010 (+18.4 percent) and 2011 (+26.4 percent), as measured by the CPI-U.
• Healthcare spending rose from $3,126 in 2009 to $3,313 in 2011. The overall increase in healthcare spending was driven by a 7.7-percent increase in health insurance spending during the period. The level of spending for healthcare has increased every year starting in 1996, while the level of spending for health insurance has increased every year starting in 1997.
• Cash contributions fell 5.2 percent from 2009 to 2010, then rose almost by the same margin from 2010 to 2011 (+5.4 percent).