The average American consumer earning a median salary of approximately $74,000 a year spends approximately $18,000 to $19,000 per year on consumer goods as of December 2017, according to the U.S. Bureau of Labor Statistics, the most recently available data, as of Aug. 4, 2019.
Consumer goods, alternatively referred to as final goods or retail goods, includes essentially all retail products purchased by consumers – food, clothing, electronics, jewelry, personal hygiene and household cleaning products, furniture, books and magazines, and tools and other outdoor equipment. Consumer goods expenditures account for nearly one-third of total consumer spending annually. The largest percentage of consumer goods expenditures, approximately 25%, goes for food.
A subcategory of consumer goods, consumer staples are products that people consider essential and therefore buy the most of. These products include beverages, food, household items, and tobacco. Other consumer goods that people buy on a regular basis would be cleaning products, personal hygiene items and clothing.
Consumer spending, which includes consumer goods and other expenditures like housing and transportation, is reported monthly and considered a leading economic indicator. While food, housing and transportation expenditures tend to remain relatively stable, nearly every other consumer spending area is subject to significant fluctuations depending on current economic conditions.
Consumer expenditures for items such as jewelry, electronics and automobiles are typically subject to the greatest fluctuations. These are areas where consumers tend to cut back their expenses substantially during difficult economic times when they have less disposable income remaining after paying for basic expenses such as food, housing, and utilities. Major appliance purchases also tend to be significantly affected by economic downturns when consumers attempt to minimize their expenditures.
During periods when the overall economy and consumer spending are sluggish, the U.S. government sometimes attempts to stimulate spending through the use of tax cuts. Such tax cuts can increase consumer spending and boost the overall economy. The effectiveness of this tactic is limited during times of high unemployment, since the effects of higher unemployment (people spending less because they have lower or no income) tend to offset extra consumer spending by people who are employed.