One of the reasons that consumers continue to move the U.S. economy forward is that they are spending more on things that they probably don’t need. While separating needs from wants is partly an exercise in subjectivity, there are certain categories of goods and services that most people could probably do without if required.
These categories include, for instance, jewelry and restaurants. Non-necessary items comprise nearly a fifth of personal consumption in America, or more than two trillion dollars per year. As indicated by Bloomberg, for most of the past six decades, this non-essential consumption played a secondary role in economic expansions, with spending on more necessary items like groceries and shelter taking the lead. During the current millennium, the roles have switched.
Since the current economic recovery began in June of two thousand and nine, spending on the things people don’t need has expanded at an average annualized rate of three point three percent adjusted for inflation compared with two percent on essential items. This could be a sign of greater overall prosperity or simply reflect the increasing concentration of wealth in the hands of the rich.
