The Census Bureau has been conducting consumer surveys for the Bureau of Labor Statistics (BLS) for over four decades. These surveys collect data on the buying habits, income, and characteristics of US consumers, summarized in annual Consumer Expenditure Survey (CES) reports. If you want to understand how Americans of all income levels are managing financially, the CES reports are a must-read.
To illustrate the above point, let's look at some CES data. First, we have to define "consumer unit", which is the CES unit of analysis. Similar to family or household, a consumer unit is any of the following:
- All members of a particular household who are related by blood, marriage, adoption, or other legal arrangements;
- A person living alone or sharing a household with others or living as a roomer in a private home or lodging house or in permanent living quarters in a hotel or motel, but who is financially independent; or
- Two or more persons living together who use their incomes to make joint expenditure decisions.
That said, in my own discussion I'll be using "household", because writing about people as "consumer units" is just too cold. Now, a couple CES tables from 1999 and 2015:
Source: https://www.bls.gov/cex/csxreport.htm#annual
Source: https://www.bls.gov/cex/csxreport.htm#annual
Lots of patterns to detect from these tables. In both 1999 and 2015, lower-income folk spent quite a bit more than their reported pretax income - evidence that pretax income is not a very good indicator of actual financial resources. In both years, households in the top two income quintiles had more earners, fewer seniors and were bigger than households in lower quintiles. It also appears that all income groups spent quite a bit more in 2015 than in 1999. So is life getting better overall for Americans? At this point, not enough data. Stay tuned....
Next: People are spending more but does that mean they're better off? Looking at inflation and housing.