Wealth And Income Disparity, Not So Much In Consumption Patterns

by: Marc Chandler

The growing concentration of income and wealth in the US has been well documented. Its significance and appropriate, in any, policy response is the subject matter of the key political dialogue that is likely to persist through the 2016 presidential election.

These Great Graphics were posted in The Atlantic by Derek Thompson. The data comes from the US Bureau of Labor Statistics. The top chart shows how the average US household spends its income.

However, the general pattern does not vary by socio-economic status. Households from dramatically different income levels spend about Using the highest education level in the household as a proxy for socio-economic status, the lower chart shows the distribution of consumption is closer than one might intuitively expect.

Click to enlarge

Households where the highest education is high school, a slightly higher percentage of their spending is for food at home and a little less for food away from home. Housing and transportation also commands a slightly greater share of their spending.

At the opposite extreme, households with a college degree tend to eat out a little more. They are also able to save more and spend more on the "other" catch-all category.

Across socio-economic groups, the US household spending patterns are very American. In contrast to the US where housing and transportation account for about 45% of Americans' spending in Japan, housing and transportation account for a little more than 30% of household spending. Cultural expenditures and alcohol account for about 7% of the average American household spending. In the UK, it is closer to 20%.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.