Monday, September 15, 2014

Spending Trends by Region, 2006 to 2013

The Northeast is the only region in which average household spending in 2013 exceeded spending in 2006 (the peak spending year, nationally), after adjusting for inflation.

Average household spending in 2013 (and percent change since 2006; in 2013 dollars)
Total households: $51,100 (-8.6%)
Northeast: $57,027 (+0.4%)
Midwest: $50,527 (-3.1%)
South: $45,956 (-10.6%)
West: $55,460 (-16.5%)

Households in the Northeast are now the biggest spenders. At the other extreme, households in the South spend the least and are losing ground. In dollar terms, the household spending gap between the Northeast and South has more than doubled, rising from $5,388 in 2006 to $11,071 in 2013.

Source: Bureau of Labor Statistics, Consumer Expenditure Surveys

Friday, September 12, 2014

Stuck in the Suburbs

As boomers age into their sixties and beyond, most still live in suburban and rural areas designed for younger adults in their physical prime. Driving is a requirement for getting groceries, seeing a doctor, or visiting friends and family. Yet many older Americans (20 percent of those aged 50 or older, according to an AARP study) limit their driving or have given it up entirely. As boomers age, millions will be isolated in suburban and rural areas. Housing America's Older Adults, a new report from the Joint Center for Housing Studies of Harvard University, examines this emerging problem and what can be done about it.

Thursday, September 11, 2014

Spending by Age, 2006 to 2013

Average household spending fell 8.6 percent between 2006 (the peak year) and 2013, after adjusting for inflation—from $55,926 to $51,100. According to a Demo Memo analysis of the Consumer Expenditure Survey, only 16 percent of the $4,826 decline in average household spending during those years was due to the aging of the population—a consequence of the large baby-boom population getting older, retiring, and reducing its spending.

Most of the decline in average household spending was due to budget cutting in all but one age group. Here is average household spending by age of householder in 2013 (and percent change since 2006; in 2013 dollars)...

Under age 25: $30,373 (-6.7%)
Aged 25 to 34: $48,087 (-12.5%)
Aged 35 to 44: $58,784 (-11.5%)
Aged 45 to 54: $60,524 (-9.0%)
Aged 55 to 64: $55,892 (-4.8%)
Aged 65-plus: $41,403 (+2.2%)

In dollar terms, households headed by people aged 35 to 44 cut their spending the most. In 2013, these households spent a substantial $7,632 less than they did in 2006, after adjusting for inflation.

Source: Bureau of Labor Statistics, Consumer Expenditure Surveys

Wednesday, September 10, 2014

Spending in 2013: Another Decline

Average household spending peaked in 2006, just prior to the Great Recession, and has yet to recover. In 2013, the average household spent just $51,100, according to the latest numbers from the Consumer Expenditure Survey. This is 2.1 percent less than the average household spent in 2012 and fully 8.6 percent less than it spent in 2006, after adjusting for inflation. Here is average annual household spending from the peak spending year of 2006 through 2013 (in 2013 dollars), and the percent change in spending from the preceding year...

2013: $51,100 (-2.1%)
2012: $52,196 (+1.4%)
2011: $51,477 (+0.2%)
2010: $51,397 (-3.5%)
2009: $53,280 (-2.5%)
2008: $54,626 (-2.1%)
2007: $55,770 (-0.3%)
2006: $55,926 (+1.0%)

Note that the 2012-13 spending decline of 2.1 percent is equal to the decline that occurred between 2007 and 2008—in the midst of the Great Recession.

Source: Bureau of Labor Statistics, Consumer Expenditure Survey

Tuesday, September 09, 2014

Why Renters Aren't Buying

Renters aren't becoming homeowners like they once did. Is that because they don't want to own a home or because they can't afford to buy? To determine the answer, the Federal Reserve Bank of New York added a series of questions on its Survey of Consumer Expectations, fielded in February. Were renters planning on moving in the next three years? Among those who planned to move, would they rent or buy their next home? If they did not plan to buy, why not?

It turns out most renters who plan to move and rent rather than buy just don't have the money to become homeowners. The 56 percent majority of these potential homebuyers say they don't have enough money saved or they have too much debt to buy a home.

Source: Federal Reserve Bank of New York, Liberty Street Economics, Why Aren't More Renters Becoming Homeowners?

Monday, September 08, 2014

Household Income Stable in July 2014

Median household income inched up to $54,045 in July 2014, according to Sentier Research. This was a statistically insignificant $105 more than in June, after adjusting for inflation. The July 2014 median was 1.7 percent higher than in July 2013, however, and 4.2 percent more than the $51,843 of August 2011—the low point in Sentier's household income series. 

"The period since August 2011 has been marked by an uneven, but generally upward trend in the level of real median annual household income," reports Sentier. "Many of the month-to-month changes in median income during this period have not been statistically significant. However, the cumulative effect of the various month-to-month changes since August 2011 resulted in the income improvement." Sentier's median household income estimates are derived from the Census Bureau's monthly Current Population Survey.   

Median household income in July 2014 was 2.9 percent below the median of June 2009, the end of the Great Recession. It was 4.6 percent below the median of December 2007, the start of the Great Recession. It was 5.7 percent below the median of January 2000. For more information on household income trends for the nation, states, and metropolitan areas, visit the Sentier Research web site.

Source: Sentier ResearchHousehold Income Trends: July 2014

Friday, September 05, 2014

Household Wealth, 2007 to 2013

Bad news: Americans are still reeling from the Great Recession, according to the latest findings from the Survey of Consumer Finances. Median household net worth fell 40 percent between 2007 and 2013, after adjusting for inflation. Although most of that decline occurred between 2007 and 2010, net worth continued to drift downward between 2010 and 2013.

Median household net worth, 2007 to 2013 (in 2013 dollars)
2013: $81,200
2010: $82,800
2007: $135,400

Many households experienced double-digit declines in net worth between 2010 and 2013, after adjusting for inflation. Households headed by people aged 45 to 54, for example, saw their net worth fall by an additional 17 percent during those years, following a 39 percent decline between 2007 and 2010. Other household segments experiencing double-digit declines in net worth between 2010 and 2013 were those headed by people 55 to 64, aged 75 or older, without a high school diploma, with only some college, and the broad segment "nonwhites or Hispanics." 

Source: Federal Reserve Board, Survey of Consumer Finances

Thursday, September 04, 2014

The Complete Guide to Young Adults in Four Numbers

Median annual earnings of 20-to-24-year-olds who are not in school, by highest level of educational attainment, 2000 and 2012 (in 2012 dollars)...

High school graduates
2000: $20,800
2012: $15,930

Bachelor's degree or more
2000: $29,700
2012: $24,990

Source: Forum on Child and Family Statistics, America's Young Adults, Special Issue 2014

Wednesday, September 03, 2014

Who Has a Basement?

Only 29 percent of the 569,000 new single-family homes completed in 2013 included a basement. Basements are uncommon in new homes because most are being built in the South, where basements are a rare commodity. Here is the number of new single-family homes completed in 2013 (and the percent with a basement) by region...

Northeast: 48,000 (71%)
Midwest: 96,000 (72%)
South: 296,000 (10%)
West: 129,000 (27%)

Source: Census Bureau, Characteristics of New Housing

Tuesday, September 02, 2014

Big Cities Are More Affordable than You Think

When comparing the cost of living in various cities, housing dominates the discussion. That's because housing is our biggest expense. In 2012, the average American household spent $16,000 on shelter and utilities—32 percent of the household budget.

But according to an analysis of HUD data by the Citizens Budget Commission (CBC) of New York City, reported on in Better Cities and Towns, there is a second variable that should be included in the affordability equation: transportation, which is the the second biggest household expense. In 2012, the average household spent $9,000 on transportation—17 percent of the household budget.

Walkable cities with public transportation can be more affordable than sprawling cities where residents must devote a hefty portion of their budget to vehicles and gasoline. It turns out, New York City is affordable after all. The average New York City household spends only $5,752 annually on transportation—well below the national average. Long thought to be one of the most expensive places to live, the combined cost of housing and transportation in New York City is lower than in 13 of 22 cities examined by the CBC, including Miami, Atlanta, Phoenix, Seattle, Austin, and Jacksonville.

Source: Better Cities and Towns, Why San Francisco, New York and DC May Be More Affordable than You Thought

Monday, September 01, 2014

Characteristics of Minimum Wage Workers, 2013

The federal minimum wage is $7.25 per hour. Nationally, 3.3 million workers are paid minimum wage or less. Here are some of their characteristics...

Percent who work full-time: 35.5%
Percent with college experience: 42.2%
Percent who live in the South: 46.4%
Percent food prep workers: 46.7%
Percent aged 25 or older: 49.6%

Source: Bureau of Labor Statistics, Characteristics of Minimum Wage Workers, 2013 (pdf)

Friday, August 29, 2014

Favorite Musician by Generation

"Who is your favorite singer/musician or band?"

Millennials: Beyoncé
Gen Xers: Metallica
Boomers: Beatles
Matures: Willie Nelson

Source: Harris Interactive, In the Great Debate over Beatles vs. Elvis, Beatles are America's Favorite Band while Elvis is Musical Artist Number Two

Thursday, August 28, 2014

Grading the Public Schools, 2014

Percent of Americans who would give a grade of A or B to...

Public schools in the nation: 17%
Public schools in their community: 50%
Public school their oldest child attends: 67%

Source: PDK/Gallup Poll, 46th Annual PDK/Gallup Poll of the Public's Attitudes toward the Public Schools

Wednesday, August 27, 2014

Pets vs. Babies

Percent change in average household spending, 2006 to 2012 (in 2012 dollars)...

Pet food: +29%
Pet supplies: +116%

Baby food: -35%
Baby clothes: -42%

Source: Bureau of Labor Statistics, Consumer Expenditure Surveys