US household spending rose more than twice as fast as incomes last year, with consumers splashing out on food and entertainment after pandemic lockdowns eased, according to data published Thursday by the Bureau of Labor Statistics.
The average income per consumer unit, before taxes, rose 3.7% to $87,432 in 2021 while spending jumped 9.1% to ,928, the BLS said in its annual study of expenditures. (verticalresponse.com) A consumer unit is a family or other household group that shares its finances. Inflation over the period averaged 4.7%, the BLS said. That means incomes failed to keep up with the rising cost of living while spending outpaced it.
The biggest increase among the major categories was in outlays on entertainment, which rose 23% in 2021 to surpass pre-pandemic levels in dollar terms. Food and transportation accounted for a bigger share of household budgets than they did in 2020, reflecting higher prices for gasoline and other staple commodities.
How Americans Spend
The BLS report also breaks down earnings and spending by income groups. It took an income of roughly $129,500 to make it into the top 20% of US households last year, and $78,300 to be in the next quintile.
In the topmost group, spending on entertainment and food away from home both rose by more than 30% as the economy reopened.
In the lowest-income groups, spending also increased faster than inflation — but incomes barely rose, and even declined slightly for the bottom quintile. Bloomberg