Rise In Spending Crucial To Driving Growth Across The Board

This week we released our annual analysis of the latest data from one of America’s most influential surveys – the Consumer Expenditure Survey(CES). Conducted annually by the U.S. Census Bureau for the Bureau of Labor Statistics, the CES is the only federal survey to collect information on consumer spending across hundreds of categories.

Data from the survey forms the basis of many public policy decisions, scientific articles, and even the Consumer Price Index. It’s also a critical resource for media and marketers seeking to better understand the state of consumer spending. (We should, however, point out one significant drawback – the time lag often associated with government research. Our analysis focused on the latest available CES data – collected in 2012, and released in late 2013).



According to this most recent CES, Affluents (defined as adults with a household income of at least $100,000) were 19% of American “consumer units” (the formal sampling unit of the study; essentially government-ese for “households”). The study confirms what our more recent internal tracking studies have shown as well – Affluent spending is on the rise, and plays a key role in the economic health of many product and service categories. Across the wide range of categories we examined, Affluents spent 37% of all U.S. consumer dollars – put another way, on average, Affluents spend more than twice as much as non-Affluent consumers.

Of course, Affluent spending is particularly important to certain categories. Affluents spend about 60% of all US dollars in categories such as suits, club memberships, and sports tickets; they spend over half of the dollars spent on hotels, airfares, jewelry, and personal insurance – categories that contribute significantly to the economy not only in consumer spending, but also in tremendous advertising expenditures. In many of these categories, Ultra Affluents (the 3% of consumers with $250K+ HHI) account for 15-20% of all U.S. dollars spent.

One of the most remarkable findings from the study is the high spending of Affluents in categories that one might not think of particularly high-end or luxury-focused. For example, Affluents account for nearly half of all the dollars spent on tickets to movie theaters and theme parks, and about 40% of dollars in a diverse range of categories including cars, tech products, video subscriptions, restaurants, and home furnishings. They also over-index significantly in spending in beauty and personal care categories such as skin care, hair care, fragrance, and cosmetics.

As a whole, the data from the latest government research confirm our own – it is increasingly clear that marketers and advertisers in essentially every category will benefit by evaluating their market through the lens of Affluent and Ultra Affluent consumers, particularly as income inequality continues to grow. A bi-furcated economy increasingly calls for a consideration of bi-furcated business strategies.

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