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UNITED STATES DEPARTMENT OF OFFICE OF THE SECRETARY WASHINGTON, A Commerce Contact: Department 6:30 "To the economic FIG U R E S ON U.S. E C O N O M Y HAVE DIRECT PERSONAL IMPACT p.m . March 4, EST, summary are just I t h i n k M r. Sunday, 1984 average person Americans’ personal what Feature Lisa Weathers (202) 3 7 7 - 4 9 0 1 For Release: 1 983, News D.C. 20230 the n u m b e r s t h at: numbers. spending was a n d Mrs. in the $2.2 Average latest Commerce Department But w h e n w e tril l i o n in the American would report fourth do w e l l that quarter of to u n d e r s t a n d it m e a n s . " So says of E c o n o m i c every one economist Analysis James Byrnes (BEA), who of the points Commerce out why the Department's figure Bureau is r e l e v a n t to o f us: A n i n c r e a s e i n p e r s o n a l c o n s u m p t i o n is a g o o d o m e n fo r the e c o n o m y . In theory, w h e n c o n s u m p t i o n increases b u s i n e s s peo p l e and m a n u f a c t u r e r s feel it's drops, safe to i n c r e a s e p r o d u c t i o n and employment rises. People hire more people. are b u y i n g more so m a r k e t s Unemployment need to b e w e l l s t o c k e d w i t h th e t h i n g s t hey w a n t to buy. Increased production m e a n s m o r e jobs, g e n e r a t i n g m o r e inco m e for p e o p l e to spend. It's go o d for e v e r y b o d y c o n c e r n e d w h e n the c y c l e is c o m plete. h o w do w e d e t e r m i n e h o w m u c h people are spending and w h a t they're s p e n d i n g it for? The fact finding starts at BEA. Each month, economists and But analysts i n t he C o n s u m p t i o n B r a n c h o f t h e N a t i o n a l I n c o m e a n d W e a l t h D i v i s i o n c o l l e c t d a t a f r o m n u m e r o u s s o u r c e s to d o c u m e n t w h a t t h e n a t i o n ' s c o n s u m e r s h a v e spent. I n f o r m a t i o n is c o l l e c t e d f r o m g o v e r n m e n t a g e n c i e s s u c h as the C e n s u s B u r e a u (also a p a r t of C o m m e r c e ) , T r a n s p o r t a t i o n D e p a r t m e n t and the Federal Communications Commission, the A u t o m o b i l e M a n u f a c t u r e r s ' Institute. as w e l l Association as pri v a t e and sources such as the E d i s o n E l e c t r i c -2 The numbers say some pretty interesting things. A c c o r d i n g to J a m e s B y r n e s , b e t w e e n 197 2 a n d 1 9 8 2 t h e s h a r e o f o u r d o l l a r s p e n t f o r e n e r g y (gas, oil , e l e c t r i c i t y , n a t u r a l gas) i n c r e a s e d f r o m 6 .8 p e r c e n t to 9 .4 percent.. Dur i n g the same p e r i o d w e bought relati v e l y less energy. B y r n e s s a i d if w e h a d p u r c h a s e d t h e s a m e relative amount of energy in 1982 a s w e did in 19 7 2 w e w o u l d h a v e spent a b o u t 11. 4 p e r c e n t o f o u r d o l l a r b e c a u s e o f h i g h e r p r i c e s . So m o s t o f u s r e d u c e d o u r r e l a t i v e c o n s u m p t i o n of e n e r g y r a t h e r t h a n g i v e u p s p e n d i n g on o t h e r things. In contrast, clothing prices went up slower than other things b e t w e e n 1972 a n d 1982. We bought relatively more clothes but we spent a s m a l l e r share of o ur d o llar — 7 . 5 p e r c e n t i n 1 9 7 2 a n d 6 p e r c e n t i n 1982. "If y o u r i n c o m e i n c r e a s e d at l east as m u c h as p r i c e s , y o u c o u l d b u y just as m u c h c l o t h i n g w i t h o u t g i v i n g u p " T h e fact that p r i c e s didn't go up that." The biggest year period was jump in the in m e d i c a l a s m a n y o t h e r t h i n g s , " B y r n e s said. a s m u c h a s o t h e r t h i n g s l e t u s do share care. of o u r d o l l a r spent T h e p r i c e of m e d i c a l during the ten care went up much f a s t e r t h a n o t h e r t h i n g s . S t i l l , w e b o u g h t r e l a t i v e l y m o r e o f it. We s p e n t 9 .9 p e r c e n t o f o u r d o l l a r i n 198 2 o n p r i v a t e m e d i c a l c a r e , c o m p a r e d w i t h 7 percent ten years before. Fo o d s p e n d i n g f o llowed a fa m i l i a r trend. A c c o r d i n g to B y r n e s , people buy relati v e l y less food as they be c o m e more affluent. Food prices w e n t up faster than other items in the 1972-82 period. But as personal income fell increased more f r o m 21 p e r c e n t Byrnes decisions said In g e n e r a l , and up les s in 1982 i t s e l f now. slower than in for since consumer furniture was not prices went conditions except each year the s h a r e of o u r dollar spent for food 19.9 p e r cent. economic although, than prices than prices, to 1974, consumers' buying consumption increased more 1972. spending for d u r a b l e goods strong during than other 1972. influence personal But the decade. things, Byrnes items Although s u c h as consumers purchased said the cars durable goods trend may be relatively reversing " D u r a b l e goods p u r c h a s e s are g e t t i n g stronger, as w e s aw in the l a t t e r p a r t o f 1 9 8 3 , " h e said. "I b e l i e v e w e ' l l see the s ame t h i n g in 19 8 4 . " The primary community but by government So audience for consumption also policymakers. the ne x t time the ne w s consumption numbers is p a r t o f is a huge that p e r sonal is the b u s i n e s s f r a m e w o r k of data needed c o n s u m p t i o n is up, attention. It c o u l d m e a n a n e w j o b , m o r e m o n e y f o r a n e w a n y r a te , i t ' s g o o d n e w s — for y o u an d the economy. ### pay c a r o r suit." At
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