Consumer Spending by Generation Share of Spending on Key Consumer Items by Generation
Age and Generation greatly affect what consumer items people buy and the share of a consumer’s total expenditures allotted for these items. This is the final factoid in a series of five factoids giving a snapshot of the five adult generations using data from the 2016 Consumer Expenditure Survey. This factoid illustrates a few major consumer items bought by each generation and which generation spends a higher percentage of their expenditures on those items. *See Factoid 1 for generation birth years and ages
As Housing is a major expenditure for all consumers, Millennials are spending a higher percentage (22 percent) of their income on rent or mortgage payments. For rent alone, 37.6 percent of total spending comes from Millennials. For homeowners, Generation X spends the highest share of their expenditures on mortgage interest (6.6 percent). As they age, many Baby Boomers are paying off mortgages and simultaneously becoming by far the largest consumers of home maintenance, repairs and insurance. Last year 45 percent of these consumer expenditures were by Baby Boomers.
Millennials spend more of their income eating out than any other generation but due to population size, Gen Xers and Baby Boomers control almost 70 percent of the total dollars spent. In family-oriented Generation X, households on average spend far more than any other generation on entertainment – roughly 38 percent of total entertainment expenditures.
Cell phones, vehicles, and education are bigger ticket items for Millennials, while Gen Xers and families spend more of their incomes on apparel and shoes. Not surprisingly, Baby Boomers control much of the healthcare spending, averaging 9 percent of their consumer spending.
Perhaps the most important statistics for the furniture industry is that while Millennials currently control 22.4 percent of furniture industry sales, they also spend a higher percentage (0.9 percent) of income on furniture than any other generation. This should bode well for the industry as Millennials continue to flood into household formations. Couple this with the growing wealth of Gen Xers and the furniture industry has the demographic profile for growth in the future.
Source: Bureau of Labor Statistics, Consumer Expenditure Survey 2016