Consumer expenditures in 2012 surpass pre-recession highs

This contrasts with 2010-2011, when the increase in average expenditures mirrored the increase in prices.

Average expenditures per consumer unit (1) in 2012 were $51,442, an increase of 3.5 percent from 2011 levels, the U.S. Bureau of Labor Statistics reported today. This surpassed the spending peak recorded in 2008, after which the effects of the recession led to a low of $48,109 in 2010. The 2012 calendar year increase in spending outpaced the 2.1-percent increase in prices for goods and services during the same period, as measured by the Consumer Price Index (CPI-U). This contrasts with 2010-2011, when the increase in average expenditures mirrored the increase in prices.

Most of the major components of household spending increased in 2012, with apparel being the lone exception, as shown in table A. The 11.2-percent rise in cash contributions (including payments for support of college students, alimony and child support, and giving to charities and religious organizations) was the largest percentage increase among all major components. Overall spending on transportation (+8.5 percent) and health care (+7.3 percent) rose significantly, while spending on housing (+0.5 percent) and entertainment (+1.3 percent) only increased modestly. Other highlights include a 2.2-percent increase in food and a 3.1-percent increase in personal insurance and pensions.

Spending patterns, 2010-2012

Since overall expenditures began to increase again in 2011, cash contributions, health care, and transportation have had the largest percentage increases of all the major expenditure items. Table B shows some of the more prominent components of these categories from 2010 to 2012. Spending changes included:

• The 11.2-percent increase in cash contributions since 2011 can largely be attributed to a 13.1-percent increase in cash contributions to churches and religious organizations over that same time period. This increase is amplified due to expenditures in this category falling in 2011.
• Health insurance routinely consumes nearly 60 percent of overall health care expenditures. The 12.6-percent increase in health insurance since 2010 was the driving force behind the increased expenditures on overall health care.
• Gasoline expenditures (largely dependent on gasoline prices) rose 29.6 percent from 2010 to 2012, but the majority of that was due to a 24.7 percent increase in 2011. In 2012 gasoline expenditures increased 4.0 percent.
• Despite gasoline expenditures remaining relatively stable in 2012, overall expenditures on transportation continued to rise (+17.2 percent since 2010). This can be traced to a 20.3-percent increase in expenditures on vehicle purchases from 2011 to 2012.

Spending by selected demographics

Consumer Expenditure Survey (CE) data measure how consumers allocate their spending among the various components of total expenditures. For example, table C compares the share allocated to selected expenditures by ethnicity and race. Hispanic consumer units (CUs) allocated more money to transportation and food than the non-Hispanic groups. Black, non-Hispanic CUs allocated more money to housing than any other group, and white, non-Hispanic CUs allocated more money to health care and entertainment than other CUs. Share of spending on cash contributions, the category with the largest percentage increase for all CUs in 2012 was varied, with Hispanics devoting a smaller portion than their non-Hispanic counterparts.