Spending on Food and Clothing at All-Time Low

Using BEA data on annual expenditures for clothing and shoes (data), and annual disposable personal income (data), the chart above show spending on clothing as a percent of income from 1929 to 2007. From double-digit levels back in the 1930s and 1940s, average spending on clothing as percent of after-tax income was down to 3.68% in 2007.

The chart above shows spending on food and clothing as a percent of disposable personal income back to 1929, falling from more than 1/3 of personal income in the 1930s and 1940s to only 13.48% by 2007.

Bottom Line: The good old days are now, and it's nothing like the Great Depression. Nothing.

Comments

[Paul Killinger:]

Yes, Mark, the percentage of our disposable income we spend on food and clothing has declined steadily throughout our lifetimes. One would conclude this is the result of increased agricultural efficiencies and global trade policies, respectively.

Nevertheless, the meltdown in our financial markets is much more reminiscent of the 30's than the hyperinflation of the 1970's. We'll see how this turns out.

As an aside, the real cost of automotive products has declined steadily over the years, as well. It appears this was an eventuality Detroit neglected to account for along the way.

As always, thank you for your thought provoking posts.

2008 Sep 28 10:08 AM