Changes in U.S. Consumer Spending, 2007-2010

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Gwen Sharp of Sociological Images comments on an Economist graph that shows how spending patterns have changed in the US during the Great Recession.

The results provide a good snapshot of the economic trade-offs Americans are making (i.e., we’re buying more canned veggies and eating out less), as well as which industries are taking the biggest hit as consumers redefine their products as less essential.

The “nominal” numbers refer to the unadjusted overall changes in spending; the “real” numbers are adjusted for the fact that prices rose by about 5.2% on average, so consumers are getting less for what they spend. So the light blue bars tell you the absolute change in what we’re spending; the dark blue bars, the change in spending relative to how much we’re buying. When adjusted for price inflation, consumer spending fell by about 8%.

Changes in U.S. Consumer Spending, 2007-2010

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  1. I would have guessed instead that ‘processed vegetables’ referred not to canned goods, but that rather large section now in our produce area selling packaged cleaned lettuce, baby spring greens, baby spinach and arugula.

    BTW, I tried throwing a handful of fresh spinach into my smoothies and it was still delicious.  The color was a little different, that’s all.

    1. The ever-expanding selection of flash frozen vegetables might also be in this category. The steam-in-bag technology marketed since 2007 makes it more popular.

      1. Yes, per government website: Processed Vegetables includes canned, dried, and frozen vegetables, and vegetable juices.

  2. I find the explanation of Nominal versus Real to be confusing, especially the second half of the sentence “So the light blue bars tell you the absolute change in what we’re spending; the dark blue bars, the change in spending relative to how much we’re buying.”

    Am I right that you could more simply say: the light blue bars show the change in dollars spent on that category; the dark blue bars show the change in the actual number of that product (amount of that service) that was purchased?

    1. That’s basically how I understood it too. It’s most obvious in the tobacco products category – total “nominal” spending is up because cigarettes are so much more expensive/taxed than they were a few years ago, but fewer people are buying them so the “real” spending is down.

    2. I think it refers to “‘Realized”. Real, as in substantial, maybe way outside the +/- error boundaries. 

  3. I’d have thought the Alcoholic Beverages category would have gone way up. At least I’m doing my part!

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