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Economy in Brief

Consumer Spending By State
by Charles Steindel  October 11, 2018

Last Thursday BEA released its estimates of 2017 state-level consumer spending. These figures—only available at an annual frequency—are the only estimates of any state-level GDP expenditure category.

In the release BEA highlights 2016-2017 growth in spending. Not surprisingly, states which saw the most rapid growth in employment (and GDP) saw the strongest gains in consumer spending: these were concentrated in the western half of the nation (Idaho was first, with a 6.9% increase—North Dakota was last, with a 2.0% gain). Data on per capita spending is also featured. As one would expect, per capita spending is very closely linked to per capita income (Massachusetts first, Mississippi last).

The state consumption numbers are clearly not very timely or revelatory about current developments, with the data for 2017 as a whole being released in late 2018. There may also be questions raised about the accuracy of the data. 2017 was an economic census year, and for that reason, the data for that year may be more reliable than those for 2016. The numbers for intercensus years are largely derived by allocating national spending totals across states by employee compensation in the industries providing consumer goods and services. This latter is a strong assumption. For that reason, one might be cautious in drawing too much inference from the 2016-2017 growth figures.

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