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FACTS ON POLICY: Consumer Spending
December 19, 2006
Personal consumption accounts for 70 percent of gross domestic product.
The gross domestic product (GDP) is the generally accepted measure of the size of the national economy. It is the sum of investment, personal consumption, government spending, and net exports. Personal consumption, at 70 percent, is the largest component of GDP. Other components of GDP include
–Investment: 17 percent –Government spending: 19 percent –Net exports: –6 percent
General consumer spending
- According to the 2004 Consumer Expenditures Survey conducted by the Bureau of Labor Statistics, the average consumer household spent $43,395 in 2004.
- Spending on food, housing, and apparel account for almost 50 percent of total expenditures.
- Housing expenses constitute the largest portion of spending, accounting for roughly one-third of the total.
- Other major categories of spending:
- –Food: 13 percent
- –Transportation: 18 percent
Holiday spending
- According to the National Retail Federation, total holiday retail sales for 2006 are expected to hit $457 billion. This is about a 5 percent increase from last year.
- In the 2006 holiday season, the average consumer will spend $791.
- A little more than 20 percent of the annual retail sales occur during the months of November and December.
Figure 1
Breakdown of Personal Consumption Expenditures by Major Category
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