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Thursday, March 28, 2024

What Americans Spent The Most Money On In The Third Quarter

Courtesy of ZeroHedge. View original post here.

One quarter after Americans unexpectedly spluged on recreational vehicles (and, more predictably, healthcare) US spending has returned to a more normal pattern in Q3.

As we hinted at the end of August in “Harvey’s Destruction May Have Solved The Auto Industry’s Inventory Problem“, whether due to hurricanes or not, according to the BEA, which admitted it was unable to calculate the overall impact of Hurricanes Harvey and Irma, noting that “it is not possible to estimate the overall impact of Hurricanes Harvey and Irma on 2017 third quarter GDP“, the Department of Commerce announced that in the third quarter the biggest driver of marginal spending was Motor Vehicles and Parts, which increased by $15.6 billion to $463.5 billion. Which, considering recent data US and global automakers is somewhat paradoxical considering the ongoing decline in overall sales in the second half of 2017. It was also surprising because as Americans splurged on cars, they pulled back on gasoline purchases, which was the single biggest detractor to spending, subtracting a marginal $3.5 billion in PCE, to $283.6 billion.

In any case, spending on autos was followed by the catch-all category “Other non-Durable Goods” which saw a $10.3 billion increase in spending to $1.067 billion, followed by that traditional staple “Healthcare” which added another $7.6 billion.

Going down the list, we then get Furnishings, Food & Beverages, Other Durable Goods, Financial Services and Insurance, Food Services and Accommodations, Recreation Services and so on. Not surprisingly, after boosting growth earlier in the year, Recreational Goods and Vehicles was modestly lower in the third quarter.

The full breakdown is below.

And now we wait for the revisions to this initial estimate over the coming two months, because something tells us that the auto spending spree will be thoroughly revised well lower.

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