The growing willingness of Southern Californians to spend can be considered a sign of prosperity, especially coming out of an economic downturn, but the stubborn lack of growth of local incomes suggests this higher spending might be stretching local household budgets, it was reported Thursday.
Once a year the federal government releases data detailing how much Americans spend. Its part of the math that calculates the Consumer Price Index, and it’s quite detailed, tracking costs ranging from housing to dining out to gasoline to school books, doctor visits and recreation.
The latest expenditure tally shows consumer spending for the average household in Los Angeles, Orange, Riverside and San Bernardino counties grew by an average $11,659 in five years — to $66,971 a year in 2016-17 vs. $55,312 in 2011-2012, The Orange County Register reported.
That 21 percent gain is a heady recovery from the penny-pinching days just after the Great Recession ended. And it shows Southern Californian households spent 14 percent more than the typical American in 2016-17.
The buying binge is also is the result of the region’s surging costs of living, expenditures that create financial stress.
A key challenge for locals balancing the family checkbooks is that in these same five years the average Southern California incomes rose just $9,469 — only 10 percent — to $76,471 from $69,562. That means local households earned just 3 percent more than the average American in 2016-17.
So what drives the higher spending by Southern Californians? According to The Register, key areas of additional spending include:
$3,460 more on housing — a 17 percent jump to $24,310 spent per year. Southern California’s housing expenditures run 26 percent above the $19,360 spent nationally. That translates to housing being 36.3 percent of local expenditures vs. 33 percent nationwide.
Also, $2,890 more on personal insurance and pensions; $1,240 more on healthcare: $1,210 more on food; $880 more on transportation; $540 more on education; $360 more on entertainment; $140 more on personal care products and services; $50 more on tobacco products; $40 more on reading; but $10 less on apparel and services and $10 less on alcoholic beverages.
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