For the first time in 2009, consumers spent less money than they did the year before. Household spending decreased 2.8 percent from $50,486 in 2008 to $49,067 in 2009. This is the first spending dip since the Bureau of Labor Statistics began measuring consumer spending in 1984. Consumers cut their spending on almost all goods and services except for health care (up 5 percent), education (up 2.1 percent), and tobacco products (up 19.9 percent) between 2008 and 2009, the Consumer Expenditure Survey found. Here’s a look at what we’re now spending less on.
Transportation. Americans reduced the amount they spent on transportation by 11 percent between 2008 and 2009, mainly by purchasing lower cost gasoline and motor oil (down 26.9 percent). Gas prices significantly spiked in 2008 and then fell in 2009, resulting in average annual expenditures on gasoline dropping from $2,715 in 2008 to $1,986 in 2009. Drivers also spent an average of 3.6 percent less on vehicle purchases.
Household furnishings and equipment. Consumers trimmed about $118 from their household budgets by cutting back on their purchases of household furnishings and equipment, a decrease of 7.3 percent from 2008. Housing expenditures overall dropped by 1.3 percent in 2009.
Entertainment. Individuals cut their entertainment expenses from an average of $2,835 in 2008 to $2,693 in 2009. The 5 percent drop in entertainment spending was driven by decreases in audio and visual equipment and services purchases (down 5.9 percent) and recreational supplies, equipment, and services (down 16.5 percent), such as recreational vehicles, boats, sporting goods, and photographic equipment. “These items tend to be discretionary purchases and the decrease may reflect the difficult economic conditions,” according to the BLS report. Americans also cut spending on reading materials by 5.2 percent.
Meals out. Spending on food away from home declined by 2.9 percent from $2,698 in 2008 to $2,619 in 2009. Costs for meals at home remained about the same as last year, although many households cut back on dairy products (down 5.6 percent).
Alcohol. Americans reduced spending on alcoholic beverages by 2 percent, spending an average of $9 less per household in 2009 than 2008.
Apparel and services. The proportion of spending dedicated to apparel and services declined by 4.2 percent in 2009, and hit a record low share of the household budget. “These declines on apparel spending were influenced by the faltering economy of the past 2 years, but a prevailing trend of decreases in apparel spending in the United States has emerged when measured as a share of the household budget,” according to the BLS report. Spending on men’s apparel dropped 10.3 percent, while women’s apparel spending fell by 5.6 percent. There was also a 3.2 percent decline in spending on personal care products and services.
Retirement saving. Workers reduced their pension and Social Security contributions by 2.4 percent to an average of $5,162 in 2009. Mid-career workers between ages 45 and 54 saved the most for retirement, averaging $7,226 in 2009. Those on the verge of retirement between ages 55 and 64 saved an average of $6,347.