One of the first things you want to understand before starting any business is your target audience—more specifically, their spending capacity.
With over $507 billion in ecommerce sales in the first half of 2022 alone, the United States market definitely shows potential. So how much does the average American spend per year?
Average American spending per year
According to the latest statistics, the average yearly expenses of a US consumer in 2021 hit $66,928—an average of around $5,577 per month.
This represented a 9.1% increase from 2020, during which average consumer spending in the US was $61,332. In comparison, the year before saw spending fall by 2.7 percent from $63036 in 2019, marking the first decrease in years.
Prior to 2020, the average annual American spending had been rising steadily over the past few years. In fact, from 2017 to 2019, US consumers increased their average annual expenditure by around five percent, with an average annual growth rate of 2.5%.
Interestingly, the rate of increase in average consumer spending in the US is slower than the rate of increase in income (before taxes). From 2017 to 2021, the average American income rose from $73,573 to $87,432—an 18.8% overall increase. Meanwhile, average yearly expenses grew by 11.4% in the same period.
Average Consumer Spending: Top Expenses
US consumers’ biggest expenditure is on housing. In 2021, the typical US consumer spent $22,624 on housing, which covered expenses on both owned and rented dwellings and accommodation spent on out-of-town trips. This represented 33.8% of their average yearly expenses and a 9.1% annual increase.
US consumers’ second-highest expense was transportation. Of the average yearly expenses in 2021, $10,961, (totaling 16.4%), was spent on transportation. This included vehicle purchases, gasoline, public transportation, and other related expenses.
The third-biggest expenditure was food. The average US consumer spent $8,289 on food in 2021, 13.4% less than they did in 2020. This is followed by personal insurance and pensions, on which $7,873 was spent.
In total, the top three expenditures of US consumers in 2021, housing, transportation, and food, added up to $41,874—or 62.6% of their average yearly expenses.
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