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Consumer goods are products manufactured and sold for final consumption by the purchaser.
According to the U.S. Bureau of Labor Statistics, an American household earning an average annual income of $101,805 before taxes spent about $77,280 on consumer expenditures in 2023 (the latest data available). Housing costs accounted for about a third (33%) of the total expenditures. Transportation accounted for 17%, and food accounted for nearly 13%.
Key Takeaways
- Non-durable consumer goods are consumed immediately or have a life span of fewer than three years. Take, for example, food and clothing.
- Durable consumer goods have a life span of over three years—for example, cars and furniture.
- On average, American households spend a third of their expenditures on housing.
What Are Consumer Goods?
Consumer goods are also known as retail goods and include food, clothing, electronics, jewelry, personal hygiene products, household cleaning products, furniture, books, magazines, tools, and outdoor equipment. The purchasers of consumer goods do not resell the goods but will use them daily. Expenditures on consumer goods account for nearly one-third of total consumer spending annually.
Consumer goods include durable and non-durable consumer goods. Durable consumer goods are products with a lifespan greater than three years, such as cars, furniture, and appliances. Non-durable consumer goods are consumed immediately, like food and clothing.
Important
In the United States, measuring the amount of money spent on consumer goods is key to calculating the country’s gross domestic product (GDP), which measures the size of the economy and growth rate.
Consumer Spending
A subcategory of consumer goods, consumer staples, are products that people consider essential. They’re what people buy the most. These products include beverages, food, household items, and tobacco. Other consumer goods that people buy regularly include cleaning products, personal hygiene items, and clothing.
According to the U.S. Bureau of Labor Statistics, an American household earning an average income of $101,805 before taxes in 2023 (the latest available data) allocated annual spending on average to:
- Food at home: $6,053
- Food away from home: $3,933
- Apparel and services: $2,041
- Vehicle purchases: $5,539
- Gasoline: $2,449
- Personal care products and services: $950
- Entertainment (including pets): $3,635
What Affects Consumer Spending?
Consumer spending can reflect fluctuations in economic conditions. Expenditures for jewelry, electronics, and automobiles are typically subject to the greatest fluctuations. These are areas where consumers tend to cut back their expenses substantially during difficult economic times when they have less disposable income remaining after paying for basic expenses such as food, housing, and utilities.
Why Is Consumer Spending Used as an Economic Indicator?
Consumer spending, which includes consumer goods and other expenditures like housing and transportation, is reported monthly and considered a leading economic indicator. The goods and services purchased in the United States help gauge the economy’s strength.
How Can the U.S. Government Boost Consumer Spending?
During periods when the overall economy and consumer spending are sluggish, the U.S. government sometimes attempts to stimulate spending through tax cuts. Such tax cuts can increase consumer spending and boost the overall economy. The effectiveness of this tactic is limited during times of high unemployment since the effects of higher unemployment tend to offset extra consumer spending by those who are employed.
How Much Do Americans Spend on Travel?
In 2024, the average trip cost for Americans in was $5,861. That’s 25% higher than 2023 and 39% higher than 2022, according to a survey by Squaremouth, a travel insurance marketplace.
How Much Do Americans Spend on Dining Out at Restaurants?
The Bottom Line
Consumer goods include durable and non-durable consumer goods. In 2023, Americans spent one-third (33%) of their expenditures on housing. An additional 30% was spent on food and transportation. Changes in consumer spending reflect economic conditions and are monitored by the Bureau of Labor Statistics and the Bureau of Economic Analysis.
