What Did the Average U.S. Household Spend for Food and Transportation in 2011?


My Friend the Cow by Lois Lenski.
National Dairy Council, 1946.

The BLS has reported average U.S. expenditure rates for 2011.

As compared to 2010:

  • Average incomes went up 1.9%
  • Food at home expenditures went up 5.9%
  • Transportation expenditures went up 8%


(Note that I used the “food at home” category because it most closely reflects the cost of food purchased in the grocery store.)

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In this section, I have taken food and transportation expenditures from the report and divided them by average annual income before taxes (provided by the report) to come up with the expenditure percentage for each category.

Using the calculations which follow, the average annual expenses in 2011 for food and transportation are 23.1% of before tax income for the average American.

Food average annual expense: 10.1% of pre-tax income. ($6,458 ÷ 63,685)

Food at home average annual expense: 6.0% of pre-tax income. ($3,838 ÷ 63,685)

Transportation average annual expense: 13.0% of pre-tax income. ($8,293 ÷ 63,685)

Gasoline and motor oil average annual expense: 4.2% of pre-tax income. ($2,655 ÷ 63,685)

From the report:

Expenditures on gasoline and motor oil increased 33.7 percent during the period, with a 24.5-percent increase from 2010 to 2011. The spending increase can partly be explained by the yearly rise in the price of gasoline during 2010 (+18.4 percent) and 2011 (+26.4 percent), as measured by the CPI-U.

(Note that the report categorized food stamps as income.)

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The report divides consumers into five income quintiles. The middle 20% quintile earned between $35,645 and $58,272 in 2011, for a pre-tax income of $46,190, and an after-tax income of $45,563. This group’s average annual expenditures were $42,403.

This middle quintile group’s food and transportation expenditures were:

  • 13.3% for food
  • 8.2% for food-at-home
  • 17.9% for transportation

This means that the middle (20% quintile) income American spends 31.2% of all expenditures for food and transportation. (Note that this is percent of expenditures, not percent of income.)

Today’s food expenditure numbers are modest when compared with historical figures. According to the WSJ, “In the 1960s, food spending was about 24% of all spending; in 1901, it was 43%, similar to patterns now seen in the developing world.”


Conclusion


Food and transportation costs increased more than three times as much as income in 2011.

As the dollar’s value goes down because of QE’s, our cost of imported oil and imported food goes up. Another policy, corn ethanol, is increasing the cost of domestic dairy, poultry, pork, beef, and wheat food prices.

QE’s and mortgage buy-backs are now deemed necessary by Bernanke to pay for our recent bank bailouts in this deleveraging process resulting from a central bank policy-induced housing bubble and unregulated financial innovation. Adequate banking regulation is still lacking, allowing for the possibility of more bailouts in the future.

Bubbles remain in health care spending and college costs while crony capitalism continues. Policy leading to today’s outstanding student loans which now equal a trillion dollars has contributed to the college cost bubble. Health care policy to date has not addressed sky-rocketing health expenditures adequately, either.

Thus, U.S. government policy is contributing to a lower standard of living for future Americans by placing a drag on GDP growth, job creation, consumer spending, and income distribution. Other factors, however, are also at play including changes in energy production and consumption patterns, advances in technology and communication, globalization, robotics, and increased efficiency in industries. Some of these provide a positive counterbalance for the negative influences.

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BLS Reports here:
1. http://www.bls.gov/news.release/pdf/cesan.pdf
2. http://www.bls.gov/news.release/cesan.nr0.htm

2 thoughts on “What Did the Average U.S. Household Spend for Food and Transportation in 2011?

  1. martin harris

    The food-cost as percentage-of-income stats in this presentation differ somewhat from the Bureau of Labor stats published in chart for in yesterday’s Wall Street Journal, which use a 13% number. The 7% difference between food-at-home and food-total shows that “restaurant” food is now a larger part of the total than the at-home component. No wonder Montgomery Ward isn’t around to sell barrels of flour to thrifty households any more. Question: how can non-producers credibly complain about food costs when half their spending is done for prepared-and-served-by-others, the most expensive mode possible? Answer: because they know it works, politically, for the 98% to agitate for the National Cheap Food policy at the expense of the 2%.

    Reply
  2. K.M. Post author

    Martin
    I wrote this before I read the WSJ article. The report can be used in many different ways, depending how one decides to present its data. The WSJ apparently used the middle quintile figures, which I also used, but in the category below the overall average category. If you look, it is there at 13%. The bigger difference was in the transportation figure, which jumped up to 18% for this quintile!

    As for eating processed and prepared foods, this trend might be whittled down as we face our own financial crisis, more and more people become in touch with healthy real food, and oil prices make packaging and refrigeration costs skyrocket. Those are my predictions, just can’t tell you when.

    Thanks for the comment.

    Reply

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