Consumer Spending Falls 2.8% in 2009
This is the first drop in spending from the previous year since the U.S. Labor Bureau began publishing this data in 1984.
Average annual expenditures per consumer unit fell 2.8% in 2009 following an increase of 1.7% in 2008, according to results from the Consumer Expenditure Survey (CE) released by the U.S. Bureau of Labor Statistics.
The spending decrease was larger than the 0.4% decrease in prices from 2008 to 2009 as measured by the average annual change in the Consumer Price Index.
This was the first time there has been a drop in spending from the previous year since the CE began publishing integrated data in 1984.
Spending on housing and transportation fell 1.3% and 11%, respectively, contributing to the overall drop in spending in 2009. Healthcare expenditures rose 5%, the only increase among the major components of spending.
Among the other major components, food dropped 1.1%, apparel fell 4.2%, entertainment dropped 5%, and personal insurance and pensions fell 2.4%.
Mortgage interest payments and charges, a subcomponent of housing, fell from $3,890 in 2007 to $3,594 in 2009, evidence of the higher than normal default rate on mortgages, falling house prices, lower rates of homeownership, and declining mortgage interest rates over the period.