Consumer Spending

Consumer spending is the amount of money that households spend on goods and services. It is an important indicator of economic activity, as it accounts for a large portion of a country’s gross domestic product (GDP). Consumer spending is driven by a variety of factors, including income, savings, consumer confidence, and interest rates. It is also affected by changes in the prices of goods and services.

History of Consumer Spending

Consumer spending has been a key factor in economic growth since the Industrial Revolution. As incomes rose, people began to purchase more goods and services, which in turn stimulated economic growth. In the early 20th century, consumer spending was further boosted by the introduction of installment plans, which allowed people to purchase items on credit. This led to a surge in consumer spending, which was a major factor in the economic boom of the 1920s.

In the post-World War II era, consumer spending continued to be a major driver of economic growth. The introduction of new technologies, such as television and air conditioning, further boosted consumer spending. In the late 20th century, consumer spending was further boosted by the rise of the service economy, which saw an increase in spending on services such as health care, education, and entertainment.

Comparison of Consumer Spending

Summary

Consumer spending is an important indicator of economic activity, as it accounts for a large portion of a country’s GDP. It is driven by a variety of factors, including income, savings, consumer confidence, and interest rates. It has been a key factor in economic growth since the Industrial Revolution, and has been further boosted by the introduction of installment plans and new technologies. For more information on consumer spending, visit the websites of the U.S. Bureau of Economic Analysis, the World Bank, and the Organisation for Economic Co-operation and Development.

See Also

• Gross Domestic Product (GDP)
• Consumer Confidence
• Interest Rates
• Inflation
• Unemployment
• Savings
• Income
• Retail Sales
• Consumer Price Index (CPI)
• Balance of Trade

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