Global| Oct 11 2018Consumer Spending By State
|in:Viewpoints
Summary
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 [...]
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.
Charles Steindel
AuthorMore in Author Profile »Charles Steindel has been editor of Business Economics, the journal of the National Association for Business Economics, since 2016. From 2014 to 2021 he was Resident Scholar at the Anisfield School of Business, Ramapo College of New Jersey. From 2010 to 2014 he was the first Chief Economist of the New Jersey Department of the Treasury, with responsibilities for economic and revenue projections and analysis of state economic policy. He came to the Treasury after a long career at the Federal Reserve Bank of New York, where he played a major role in forecasting and policy advice and rose to the rank of Senior Vice-President. He has served in leadership positions in a number of professional organizations. In 2011 he received the William F. Butler Award from the New York Association for Business Economics, is a fellow of NABE and of the Money Marketeers of New York University, and has received several awards for articles published in Business Economics. In 2017 he delivered Ramapo College's Sebastian J. Raciti Memorial Lecture. He is a member of the panel for the Federal Reserve Bank of Philadelphia's Survey of Professional Forecasters and of the Committee on Research in Income and Wealth. He has published papers in a range of areas, and is the author of Economic Indicators for Professionals: Putting the Statistics into Perspective. He received his bachelor's degree from Emory University, his Ph.D. from the Massachusetts Institute of Technology, and is a National Association for Business Economics Certified Business EconomistTM.