According to the U.S. Bureau of Labor Statistics, an American household earning an annual income of $94,003 spent about $72,967 on consumer goods in 2022. Housing costs accounted for over 33% of the total expenditures for goods and services.
Key Takeaways
- Consumer goods are products manufactured and sold for final consumption by the purchaser.
- Non-durable consumer goods are consumed immediately or have a life span of fewer than three years—examples are food and clothing.
- Durable consumer goods have a life span of over three years and include cars and furniture.
What Are Consumer Goods?
Consumer goods are also known as retail goods and include food, clothing, electronics, jewelry, personal hygiene products, household cleaning products,furniture, books, magazines, tools, and other outdoor equipment. The purchasers of consumer goods do not resell the goods but will use them daily. Expenditures on consumer goods account for nearly one-third of total consumer spending annually.
Consumer goods include durable and non-durable consumer goods. Durable consumer goods are products with a lifespan greater than three years, such as cars, furniture, and appliances. Non-durable consumer goods are consumed immediately like food or clothing.
In the United States, measuring the amount of money spent on consumer goods is key to calculating the country's gross domestic product (GDP), which measures the size of the economy and growth rate.
Consumer Spending
A subcategory of consumer goods, consumer staples are products individuals consider essential and buy the most. These products include beverages, food, household items, and tobacco. Other consumer goods that people buy regularly are cleaning products, personal hygiene items, andclothing.
According to the U.S. Bureau of Labor Statistics, an American household earning an average income of $94,003 before taxes in 2022 allocated annual spending on average to:
- Food at home: $5,703
- Food away from home: $3,639
- Apparel and services: $1,945
- Vehicle purchases: $4,496
- Gasoline, other fuels: $3,120
- Personal care products and services: $866
- Entertainment: $3,458
What Affects Consumer Spending?
Consumer spending can reflect fluctuations in economic conditions. Expenditures for jewelry, electronics, and automobiles are typically subject to the greatest fluctuations. These are areas where consumers tend to cut back their expenses substantially during difficult economic times when they have less disposable income remaining after paying for basic expenses such as food, housing, and utilities.
Why Is Consumer Spending Used as an Economic Indicator?
Consumer spending, which includes consumer goods and other expenditures like housing and transportation,is reported monthly and considered a leading economic indicator. The goods and services purchased by those in the United States help gauge the economy's strength.
How Can the U.S. Government Boost Consumer Spending?
During periods when the overall economy and consumer spending are sluggish, the U.S. government sometimes attempts to stimulate spending through tax cuts. Such tax cuts can increaseconsumer spending and boost the overall economy. The effectiveness of this tactic is limited during times of high unemployment since the effects of higher unemployment tend to offset extra consumer spending by those employed.
The Bottom Line
Consumer goods include durable and non-durable consumer goods. In 2022, Americans spent over one-third of their income on housing. An additional third of income was spent on food and transportation. Changes in consumer spending reflect economic conditions and are monitored by the Bureau of Labor Statistics and the Bureau of Economic Analysis.
