Consumer Spending Rises Most in the West

Americans continue to spend more on almost everything, but money habits vary widely across the states.
by | October 5, 2016
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Spending continues to rise in America, but not at the same rate in every state.

According to data published by the Bureau of Economic Analysis (BEA) this week, national personal consumption expenditures increased an average of 3.6 percent last year, compared to a 4.4 percent rise in 2014.

With the exception of Florida, all of the states with the most spending growth last year -- exceeding 4 percent -- are in the West. Shifts in spending are driven significantly by population growth, and many of these states added more new residents recently.

By comparison, states with the slowest year-over-year spending growth in 2015 include Wyoming (1.5 percent), Mississippi (1.9 percent) and North Dakota (1.9 percent).

The new BEA data also details changes in how people are spending their money.

The most notable annual change occurred in gasoline and energy expenses. Thanks to the steady decline in oil prices, Americans spent 23.9 percent less on energy, enough to account for the 0.8 percentage point slowdown in total personal consumption growth last year. Of all spending categories tracked by the BEA, it was the only one to record a decline nationally. States with the sharpest declines in energy spending included Hawaii, Louisiana, Vermont and Virginia.

On the flip side, spending growth in most states can be largely attributed to health-care costs. Spending in this category accelerated 6 percent nationally and more than 8 percent in Colorado, North Dakota and Oregon. But in Connecticut, growth in health-care spending has trailed other states in recent years, with just a 1.7 percent uptick last year.

Food services and accommodations spending similarly climbed 7.3 percent nationally -- the single largest annual increase of any category. It also accounts for some of the largest variations in growth across states: At the top are Oregon (9.9 percent), Utah (9.6 percent) and California (9.6), and at the bottom are North Dakota (1.7 percent) and West Virginia (2.1 percent) -- two states incurring economic downturns.

Housing and utilities, another major spending category, increased by at least 5 percent in 10 states and the District of Columbia. Meanwhile, the Great Lakes region registered an uptick of only 2.6 percent for the year, and housing and utilities spending in Maine rose just 1.3 percent -- the least of any state.

BEA also published a series of maps showing states’ per capita personal consumption expenditures.

The BEA data measures goods and services purchased by or on behalf of households and the net expenditures of nonprofit institutions serving households. For longer-term trends in personal consumption spending in each state, select a state and expenditure category below: