The federal Bureau of Economic Analysis today released its first deep dig into state-by-state personal consumption expenditures going back to 1997. Washington turns in the strong performance one would expect from a prosperous state with a diverse economy. For example, per-capita expenditures here grew 3.6 percent from 2011 to 2012 vs. the national average of 3.3 percent. From 1997 to 2012, it totaled 5.5 percent vs. 4.8 percent nationally.
Elsewhere in the Northwest, the performance was more uneven:
• Oregon, 3 percent from 2011-2012; 4.7 percent from 1997-2012.
• Idaho, 3.1 percent; 5.5 percent.
• Alaska, 2.5 percent; 5.6 percent.
In 2012, per-capita expenditures in Washington totaled $39,110 compared with a national average of $35,498. Unfortunately, the year-by-year data are limited by not being adjusted for inflation. Thus, in 1997 the per-capita number for Washington was $21,508 in nominal dollars. If you want to accurately geek-out, use the Bureau of Labor Statistics inflation calculator to find that this would have the same purchasing power as $31,939 in 2014 dollars. In other words, personal expenditures have grown more slowly than it would first appear.
The shorthand for why all this matters is that some 70 percent of the economy is “consumer spending.” I use quotes because it seems vulgar to reduce citizens and customers to consumers, but also because that figure also includes health-care spending, including Medicare and Medicaid. But personal expenditures get closer to the mark and are an important element in the economy.
The trouble is that since the mid-1970s, most wages have either stagnated or actually fallen. Adjusted for inflation, the typical household was one-third poorer in 2013 than in 2003. Unemployment and long-term joblessness remain a crisis. Americans have taken on greater debt to continue as “consumers.” Yet as all these forces strain against their limits, they become a big impediment to growth and the financial health of families and individuals.
You can download the entire report here.
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Today’s Econ Haiku:
Settlement not jail
Another bank’s wrist gets slapped