10 Insights from US BEA PCE Information Evaluation

Shopper spending in 2022 accounted for 68% of the US gross home product (GDP) – a vital part of the US financial system. Not surprisingly, shopper spending has performed a key function in driving the US financial development over the previous a number of a long time. We analyzed US shopper spending utilizing the private consumption expenditure (PCE) knowledge offered by the US Bureau of Financial Evaluation (BEA).

The PCE is a complete measure of shopper spending. The BEA gives PCE knowledge for a variety of products and companies. It gives a holistic view of the place US customers spend their cash. Following are 10 insights from our evaluation of the PCE knowledge from 2022 re: US shopper spending on:

1. General. In 2022, US customers spent $17.4 trillion on items and companies. That spend has nearly doubled in 17 years from $8.8 trillion in 2005. Spending declined solely throughout 2009 and 2020.
2. Items vs. companies. US customers spent a complete of $11.4 trillion (66% of the entire) on companies and $5.9 trillion (34% of the entire) on items in 2022 (see the graphic under). Aside from through the 2008-2009 recession, spending on items has grown steadily over the previous 20 years. Spending on companies has additionally grown constantly, besides in 2020.
3. Three key important companies. US customers spent nearly $3 trillion on housing and utilities and one other $2.7 trillion on healthcare companies. These two classes accounted for half of companies spending and one-third of complete shopper spending. Monetary companies and insurance coverage garnered $1.3 trillion in spending and accounted for 8% of the entire.
4. Three key discretionary companies. US customers spent $1.3 trillion on meals companies and lodging, which accounted for 7% of complete spending. They spent $615 billion (4% of the entire) on recreation companies and $549 billion (3% of the entire) on transportation companies. Shopper spending on discretionary companies was considerably impacted throughout 2020 as a consequence of COVID-19 pandemic restrictions.
5. Different companies. The BEA categorizes all companies that aren’t a part of the six key service classes listed above as “different companies.” US customers spent $1.4 trillion on different companies, which embody communication, training, private care, family upkeep, skilled, and social companies. “Different companies” accounted for 8% of complete spending.
6. NPISH. Non-profit establishments serving households (NPISH) are establishments that present items or companies without cost or at costs which can be economically insignificant. Examples embody group facilities, spiritual establishments, sports activities golf equipment, libraries, and academic establishments. NPISH are sometimes funded by numerous means corresponding to donations, membership charges, and authorities grants. Shopper spending on NPISH totaled $533 billion, accounting for 3% of complete spending in 2022.

7. Sturdy vs nondurable items. US customers spent $3.8 trillion (22% of complete) on non-durable items and $2.2 trillion (13% of complete) on sturdy items in 2022. Sturdy items are merchandise with an anticipated lifespan of three years or extra, corresponding to cars, home equipment, electronics, furnishings, and sporting gear. Non-durable items, also referred to as comfortable items, are merchandise with an anticipated lifespan of lower than three years, corresponding to meals, clothes, gasoline, family provides, medicines, and private care objects.
8. Three key nondurable good classes. In 2022, meals and drinks bought for off-premises consumption topped the checklist of non-durable items, with customers spending $1.3 trillion (7% of the entire) on this class alone. US customers spent $491 billion (3% of the entire) on clothes and footwear and $493 billion (3% of the entire) on gasoline and different power items.
9. Three key sturdy good classes. Inside sturdy items, shopper spending in three key classes – motor automobiles and components ($723 billion), furnishings and sturdy family gear ($526 billion), and leisure items and automobiles ($646 billion) – accounted for 11% of the entire spending.
10. Different nondurable and sturdy items. The BEA categorizes all nondurable items that aren’t a part of the three key non-durable items classes listed above as “different nondurable items.” The identical applies to “different sturdy items.” US customers spent $1.5 trillion (9% of the entire) on different nondurable items and $291 billion (2% of the entire) on different sturdy items. “Different nondurable items” embody prescription and non-prescription medication, video games, toys, family provides, private care merchandise, and many others. “Different sturdy items” embody classes corresponding to jewellery, watches, baggage, therapeutic medical gear, and many others.

Please be a part of our Forrester consumer webinar on US shopper spending tendencies and outlook on Could 17, 2023. We’ll talk about how US shopper spending has been altering through the years and the way inflation has affected shopper spending. We may also present Forrester’s outlook on shopper spending and the implications of those tendencies for manufacturers. And I’m completely satisfied to debate these findings additional with you by way of a Steerage Session or Inquiry.