For the first time, personal consumption spending on consumer goods exceeded $10 trillion in the United States in 2013, according to just-released Mintel data. Forecasts suggest that this figure will exceed $12 billion by 2018.
The 2014 outlook is expected to continue on a high note with spending expected to increase another 3.6 percent, which is more than three-fold the projected inflation rate for the year.
In addition to spending on essentials, including housing ($2.1 trillion) and transportation ($1.2 trillion), Americans are spending big on technology and communications and are expected to increase spending on non-essential items, including travel and entertainment, according to MarketingCharts.
In 2013, Americans spent:
- nearly $662 billion on technology and communications
(which includes consumer electronics products and pay TV services) - personal finance at about $580 billion
- food at home at $557.3 billion
- dining out at $451.3 billion
- home and garden at $413.5 billion
- leisure and entertainment at $335.8 billion
It appears as if Americans are moving away from their recession worry and are seeking a break from the past several years. Mintel researchers say that Americans need a vacation, based on its yearly comparative audit report, “American Lifestyles 2014.” The report reveals that re-kindled consumer spending is similar to what was trending pre-recession and that consumer optimism is greater than it has been in years.
Increased spending is due, in part, to Americans having become more “spend-centered,” the researchers say, and is also due to a large number of financially secure Baby Boomers reaching retirement age and being able to spend more on non-essential items.
Mintel expects to the fastest growth in spending during 2013-2018 to be seen in the following areas, with each outpacing 20 percent growth in consumer goods spending, overall:
- Leisure and entertainment: +28.5 percent
- Vacations and tourism: +27.3 percent
- Technology and communications: +25.2 percent
- Alcohol on premises: +23.7 percent
This year, only one in 10 Americans say they never spend extra money; they save it. About the same number says they “never” have any extra money, according to Mintel. In 2008 and 2013 survey results revealed that the number of savers was double that amount. Those who had said they “never” had extra money declined from 15 percent in 2008 and 12 percent in 2014.
“In 2014, it appears that America has finally stopped holding its collective breath, waiting for the other economic shoe to drop,” says Fiona O’Donnell, category manager, multicultural, lifestyles and leisure at Mintel. “After five years of slow but steady growth, Americans have passed the tipping point of prolonged economic worry and have cautiously accepted that things are better. Confidence in personal finances has allowed consumers to think about the future and look forward rather than linger over the past.”
Sources:
“How Americans Are Spending on Consumer Goods”; Marketing Charts. May 23, 2014.
“Americans Becoming More “Self-” and “Spend”-Centered as Consumer Expenditures Surpass $10 Trillion for the First Time”; Mintel. May 21, 2014.
