Courtesy of Mish.
A new PEW study on Household Incomes and Expenditures goes a long ways towards explaining why economists who expected a big jump in consumer spending based on falling gasoline prices were dead wrong.
The study shows that although expenditures recovered from the downturn, income did not.
Also, low-income families spent a far greater share of their income on core needs, such as housing, transportation, and food, than did upper-income families. Households in the lower third spent 40 percent of their income on housing, while renters in that third spent nearly half of their income on housing, as of 2014.
None of this is surprising to Mish readers, but the charts are quite interesting.
PEW based its analysis on the Bureau of Labor Statistics’ Consumer Expenditure Survey.
Previously, I have linked to Fed studies that show consumers have done just what they say they would: spend less.
However, the Fed places more faith in consumer sentiment numbers than its own surveys and real data.
