Consumer Spending & Economic Growth

Thanks to the folks at Chartporn, I ran across a very engaging area graph from VisualEconomics.Com. It shows a breakdown of consumer spending on various categories over the past 100 years. There are a number of items that are of particular interest: the significant decline in spending for food and apparel, the significant increase in spending for transportation, growth in entertainment, the growth of spending for housing, and the relatively small increase in the percentage spent on health care.

However, its value to me resides in the fact that it opens the door to discuss not only quantitative change but qualitative change. (I expect the latter, along with an increasing shift from renting to purchasing accounts for much of the growth in spending for housing.

And I would also like to know why book spending is not included with entertainment. And I also wonder what is/was included in the category of "other."

Regardless, this article can be used in economics class to introduce the idea of real growth, as well as in a personal finance class when discussing how budgets change. I would also recommend combining this graph with some of the information contained in a couple of publications from the Federal Reserve Bank of Dallas: the 1993 Annual Report and the 1997 Annual Report. While the dates don't match up at the end of the period (the information in the annual reports ends in the 80s and 90s), they do present some trends that offer some insights.

I would be glad to hear your thoughts.