While U.S. consumer spending soared to a staggering $18.85 trillion in 2023, powering nearly 70% of the economy, the real story is found in the shifting priorities of who is spending, where, and on what.
Key Takeaways
- In 2023, U.S. personal consumption expenditures (PCE) reached $18.85 trillion, marking a 6.5% increase from 2022
- U.S. consumer spending accounted for 68.2% of GDP in 2023, up from 67.9% in 2022
- Real PCE growth was 2.5% in 2023 after adjusting for inflation, driven by services spending
- PCE on housing and utilities was $3.42 trillion in 2023, 18.1% of total PCE
- Food and beverage spending for off-premises consumption hit $1.58 trillion in 2023
- Healthcare services PCE was $2.89 trillion in 2023, growing 7.8%
- Households earning $100k+ spent 32% more on travel than average in 2023
- Millennials (ages 27-42) accounted for 35% of total U.S. consumer spending in 2023
- Gen Z spending grew 18% YoY to $419 billion in 2023
- Northeast U.S. consumer spending per capita was $62,340 in 2023, highest regionally
- California retail sales totaled $852 billion in 2023, 11.5% of national total
- Southern states saw 7.2% PCE growth in 2023 vs. 5.8% national average
- PCE expected to grow 2.4% in real terms in 2024
- Consumer spending forecast to reach $20.1 trillion by 2025
- Durable goods spending projected to rise 3.2% in 2024
U.S. consumer spending grew steadily in 2023, driven significantly by services and housing.
Category Breakdowns
- PCE on housing and utilities was $3.42 trillion in 2023, 18.1% of total PCE
- Food and beverage spending for off-premises consumption hit $1.58 trillion in 2023
- Healthcare services PCE was $2.89 trillion in 2023, growing 7.8%
- Motor vehicle and parts spending totaled $1.42 trillion in 2023, up 12.4%
- Gasoline and other energy goods PCE was $0.48 trillion in 2023
- Recreation services spending reached $0.92 trillion in 2023, 4.9% growth
- Financial services and insurance PCE was $1.76 trillion in 2023
- Apparel and footwear spending totaled $0.42 trillion in 2023, down 1.2%
- Furniture and household equipment PCE was $0.68 trillion in 2023, up 5.3%
- Restaurant and hotel meals PCE hit $1.05 trillion in 2023, 9.2% increase
- Household final consumption expenditure on food was 12.8% of total in 2023 OECD data for U.S.
- U.S. consumers spent 8.7% of disposable income on transportation in 2023
- Entertainment spending averaged $2,912 per household in 2023
- Personal care products and services PCE was $0.31 trillion in 2023
- Education services spending totaled $0.22 trillion in 2023
- PCE on furnishings up 6.5% to $0.38 trillion in 2023
- Alcoholic beverages PCE was $0.15 trillion in 2023
- Tobacco products spending $0.08 trillion in 2023
- Clothing and footwear nondurables $0.24 trillion in 2023
- Drugs and sundries PCE $0.52 trillion, up 8.1% in 2023
- Household utilities $0.72 trillion in 2023 PCE
- Transportation services $0.61 trillion in 2023
- Net foreign travel PCE $0.18 trillion in 2023
- Average household spent $9,239 on housing in 2023
- Transportation averaged $10,961 per consumer unit in 2023
- Food spending $8,798 average household 2023
Category Breakdowns Interpretation
Despite our best efforts at self-care and leisure, the cold, hard math of American life dictates that we are mostly just expensive vehicles driving to overpriced homes for costly meals while worrying about our even costlier health.
Demographic Segments
- Households earning $100k+ spent 32% more on travel than average in 2023
- Millennials (ages 27-42) accounted for 35% of total U.S. consumer spending in 2023
- Gen Z spending grew 18% YoY to $419 billion in 2023
- Households with income under $50k spent 31% of budget on housing in 2023
- Baby Boomers controlled 41.6% of U.S. spending power at $8.7 trillion in 2023
- Urban households spent 15% more on dining out than rural in 2023
- Women drove 75% of apparel spending decisions in 2023
- High-income households ($200k+) spent $28,456 on food away from home annually in 2023
- Hispanic consumers spending power reached $3.2 trillion in 2023, up 9%
- Single-person households spent 22% of income on apparel in 2023
- Consumers aged 55+ spent $4,200 on healthcare annually in 2023 average
- Low-income families (<$30k) allocated 42% to food and housing combined in 2023
- College-educated consumers spent 28% more on education services in 2023
- African American buying power was $1.8 trillion, 9% of total spending in 2023
- Families with children under 18 spent $12,450 on apparel per year in 2023
- Retired households spending on recreation up 14% to $3,800 average in 2023
- Households aged 25-34 spent 2.4% of income on tobacco vs. 0.8% average in 2023
- Top 20% income quintile spent $145,320 total average in 2023
- Bottom quintile spent 35.2% on housing, highest share in 2023
- Married couples spent $82,450 annually vs. $48,210 singles in 2023
- Asian households spent $12,840 on food, highest demographic in 2023
- Renters spent 42% more on transportation than owners in 2023
- 65+ age group saved 12.4% of income vs. negative for under 25 in 2023
- Professional households spent $4,500 on education average 2023
- Childless couples spent 18% on entertainment vs. 12% with kids 2023
Demographic Segments Interpretation
While millennials and Gen Z grab the spending headlines, the real plot twist is that everyone, from high-earners splurging on travel to low-income families squeezed by housing, is essentially just funding their own version of survival—or, in the case of retirees enjoying more fun, their well-earned revenge on adulthood.
National Totals
- In 2023, U.S. personal consumption expenditures (PCE) reached $18.85 trillion, marking a 6.5% increase from 2022
- U.S. consumer spending accounted for 68.2% of GDP in 2023, up from 67.9% in 2022
- Real PCE growth was 2.5% in 2023 after adjusting for inflation, driven by services spending
- Monthly PCE for December 2023 was $15,924.5 billion at seasonally adjusted annual rate
- U.S. household final consumption expenditure per capita was $57,248 in 2023
- Consumer spending on goods rose 4.1% in 2023 to $6.72 trillion
- Services PCE increased by 7.2% to $12.13 trillion in 2023
- Annual PCE growth averaged 2.3% from 2019-2023
- Nominal PCE per capita grew 5.8% year-over-year in Q4 2023
- U.S. retail sales totaled $7.41 trillion in 2023, up 2.9% from 2022
- E-commerce sales reached $1.12 trillion in 2023, 15.1% of total retail
- In 2023, U.S. PCE on durable goods was $4.12 trillion, 21.8% of total
- Nondurable goods PCE totaled $2.60 trillion in 2023
- Services dominated PCE at 64.3% share in 2023
- December 2023 PCE growth was 0.4% month-over-month
- PCE price index rose 2.6% YoY in December 2023
- Consumer spending contributed 2.1 percentage points to GDP growth in 2023
- U.S. households saved 3.8% of disposable income in 2023
- Credit card spending hit $1.15 trillion in 2023, up 8.2%
National Totals Interpretation
It seems Americans decided in 2023 that their therapy sessions, streaming subscriptions, and Amazon orders were non-negotiable pillars of the economy, quietly financing growth while their savings accounts whispered in protest.
Regional Differences
- Northeast U.S. consumer spending per capita was $62,340 in 2023, highest regionally
- California retail sales totaled $852 billion in 2023, 11.5% of national total
- Southern states saw 7.2% PCE growth in 2023 vs. 5.8% national average
- New York metro area spending on financial services was $210 billion in 2023
- Midwest households spent 10% less on motor vehicles than coasts in 2023
- Texas consumer spending grew 8.4% to $1.2 trillion in 2023
- Florida PCE on recreation services hit $85 billion in 2023
- West region food spending per capita $4,210 in 2023, highest nationally
- Rural areas spending on healthcare 12% higher per capita than urban in 2023
- Pacific division retail e-commerce sales $180 billion in 2023
- Great Lakes states saw 3.1% decline in apparel spending in 2023
- Southeast PCE growth led by housing at 9.1% in 2023
- Mountain states recreation spending up 11% to $45 billion in 2023
- New England healthcare spending per capita $8,950 in 2023
- Nevada led states with 72.3% spending-to-income ratio in 2023
- Midwest PCE per capita $51,280 lowest regionally in 2023
- Los Angeles metro PCE $950 billion in 2023
- Plains states food spending per capita $3,890 in 2023
- Southwest utilities spending up 11% due to heat in 2023
- Boston metro healthcare PCE $120 billion 2023
- Rural South spending on vehicles 15% higher than urban 2023
- Alaska highest per capita spending $75,400 in 2023
- Chicago retail sales $112 billion 2023
- Hawaii PCE growth 9.8% tourism-driven in 2023
Regional Differences Interpretation
A reading of America's economic engine reveals that the coasts are buying the finer things while the South is buying more of everything, the middle is quietly economizing, and rural areas are paying more just to get by, proving that location dictates not just lifestyle but also financial fate.
Trends and Projections
- PCE expected to grow 2.4% in real terms in 2024
- Consumer spending forecast to reach $20.1 trillion by 2025
- Durable goods spending projected to rise 3.2% in 2024
- Services PCE growth slowing to 4.1% in 2024 from 7.2% in 2023
- Retail sales projected at 3.5% growth in 2024 to $7.67 trillion
- E-commerce share expected to hit 20% of retail by 2026
- Housing spending to increase 5.8% annually through 2028
- Food-at-home spending flat at 1.2% growth projected for 2024
- Healthcare PCE forecast to grow 5.9% per year to 2027
- Auto sales and spending projected up 4.7% in 2024
- Travel spending to surge 6.8% in 2024 to $1.3 trillion
- Apparel spending recovery to 2.1% growth in 2024
- Energy goods spending down 2.3% projected for 2024
- Gen Z spending power to double to $12 trillion by 2034
- Online grocery sales to reach 22% market share by 2025
- Consumer confidence index averaged 68.5 in 2023, impacting spending
- Luxury goods spending projected 4.5% CAGR to 2028
- Sustainable product spending up 71% since 2019, to continue 2024
- Digital payments to comprise 55% of spending by 2027
- Inflation-adjusted PCE to grow 1.8% in 2025
- Home entertainment spending +12% post-pandemic projection 2024
- Boomers spending peak expected 2026 at 45% share
- Grocery delivery spending to $250 billion by 2027
Trends and Projections Interpretation
The data paints a picture of a consumer who is cautiously opening their wallet, splurging on travel and cars while pinching pennies on energy and groceries, all while Gen Z lurks in the wings with a future fortune, ready to buy everything online in a more sustainable way.
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