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American Consumer Spending Passes $10 Trillion

According to Mintel’s American Lifestyles 2014, renewed consumer spending is in line with pre-recession trends, and consumer optimism is higher than it’s been in years. The study found that personal consumption expenditures on consumer goods reached $10 trillion for the first time in 2013, and the outlook for 2014 is for spending to increase further by 3.6%, more than three times the projected rate of inflation for the year.

The report shows forecasts that total US consumer expenditures will grow by 20% from 2013-2018 to reach $12,025 billion. In comparison, expenditures increased just 15% from 2008 to 2013.The categories that show the greatest gains over the next five years are leisure and entertainment, vacations and tourism, technology and communications, and alcohol on premises.

Fast Growing Consumer Spending Categories

(% Growth From 2013-2018; $ in Billions/2013)

Growth Category Avg. Spend 2013, B$ % Projected Growth to 2018
Leisure & Entertainment

335.8B

28.5%

Vacations & Tourism

221.8B

27.3

Technology & Communications

661.6B

25.2

Alcohol on premises (OOH)

92.7B

23.7

Avg. growth in personal consumption

10T

20%

Source: Mintel, May 2014

Over the course of one year, the share who say they spend extra money on vacations nearly doubled, the greatest gain for any one area of consumer spending, and a sign of optimism since when money is tight vacations are the first discretionary areas to be cut from the budget, says Mintel researchers.

Americans are also focused on self-improvement for 2014, says the report. Top goals for 2014 include:

Increased family time (88%)

Healthier diet (88%), exercising more (87%)

Getting household finances in order (84%)

Achieving a better work/life balance (82%)

Taking care of personal appearance (81%).

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