BLS Releases Report On Consumer Spending
The Bureau of Labor Statistics reported late last week that consumer spending was up 2.4% in 2016 to $57,311, but fell short of the 4.6% increase in 2015. Expenditures rose sharply for rental housing last year, as rental spending once again outpaced mortgage expenses. In part owing to improving fuel efficiency and Americans driving less in general, transportation costs are down 4.8%.
Despite a second year in a row of growing consumer spending, purchases were actually down when controlled for inflation. Even with spending still below pre-recession levels, another recent study found that almost 4 in 5 Americans live paycheck to paycheck. Part of the explanation for reduced household spending could come from a study last month by the Federal Reserve that showed total household debts at their highest ever levels. With many millennials rejecting conventional credit sources, household spending may remain down for the foreseeable future.