Consumer expenditures in 2024

By Shane Meyers, Geoffrey D. Paulin, and Kristen Thiel

This report analyzes data from the Diary and Interview Surveys of the Consumer Expenditure Surveys (CE) program.¹ The data in this report are drawn from a collection of CE tables, highlighting the vast array of demographic data the U.S. Bureau of Labor Statistics (BLS) has available. Income and expenditure data in this report are expressed as nominal values and show spending in U.S. dollars as reported by surveyed consumers.² These data are collected by the U.S. Census Bureau for BLS. BLS publishes the data in categories, usually defined by characteristics of the reference person for a given consumer unit (CU).³

Inflation slowed down in 2024

How did inflation affect the average household’s spending? The average CU spent 1.8-percent more on goods and services in 2024 than in 2023. Prices increased 2.9 percent from 2023 to 2024. Real spending growth, the difference between the nominal rate of spending and the rate of inflation, was −1.1 percent (1.8 percent minus 2.9 percent). As such, the average CU had a decline in real spending.⁴

Like spending and inflation, income growth slowed down. Although income before taxes continued to increase in 2024, the 2.4-percent increase was considerably below that of the increases in 2023 and 2022.⁵ (See table 1.)

Expenditure trends by major component: 2021 to 2024

Table 2 displays average annual expenditures and their associated percent changes from 2021 to 2024. Average annual expenditures rose 1.8 percent in 2024, rising $1,377 from 2023 levels of spending to $78,535.⁶ As such, 2024 contributed to a 3-year trend of decelerating spending growth. In 2021, average annual expenditures rose 9.1 percent. Spending growth decelerated in 2022 and 2023, when it rose by 9.0 and 5.7 percent, respectively.

Average annual spending changed little across all 14 major expenditure components from 2023 to 2024. Only four components saw decreased spending (entertainment, apparel and services, tobacco products and smoking supplies, and cash contributions). Spending on the five largest major components (housing, transportation, food, personal insurance and pensions, and healthcare) increased by varying degrees.

Housing

Housing continues to make up the largest share of consumer spending and increased by 3.3 percent in 2024.⁷ As was the case in 2023, upward pressure on home prices, rent for apartments, and mortgage rates contributed to this increase in spending. Spending rose for owned (by 7.0 percent) and rented (by 5.4 percent) dwellings. While the Federal Reserve did make small cuts to the federal funds rate, mortgage rates continued to remain elevated.⁸ As of the fourth quarter of 2024, the housing inventory level in the United States was 926,044 active listings, which is below the total quantity of homes on the market that existed before the COVID-19 pandemic.⁹ Thus, supply and demand forces in the housing market continued to pose challenges to prospective homebuyers.

Despite current inventory levels, the Q4 2023 to Q4 2024 change in median sales price of houses sold declined 0.9 percent.¹⁰ Even so, the homeownership rate remained stagnant at 65 percent for the fourth year in a row. Similarly, the percentage of people renting stayed the same. Rent expenditures (excluding maintenance, utilities, etc.) increased by 6.8 percent, contributing to the overall increase in rent and housing expenditures. Besides spending on shelter, spending on housekeeping supplies and utilities, fuels, and public services rose by 7.2 and 2.4 percent respectively.

Food

Food spending rose for a third consecutive year, though at a slower rate. Average annual expenditures on food increased 1.8 percent in 2024, after rising by 12.7 percent in 2022 and 6.9 percent in 2023. Food at home expenditures, which covers spending at grocery stores and similar venues, increased 2.8 percent in 2024.¹¹ Spending in most sections of the grocery store, such as fruits and vegetables (−3.5 percent) and cereals and bakery products (−6.1 percent), declined. Spending in some sections, including other food at home, remained virtually unchanged.¹² However, spending on meat, poultry, fish, and eggs rose 21.5 percent. On an individual level, each subcomponent under meat, poultry, fish, and eggs had noticeable spending gains. (See table 3.)

The food away from home component captures spending at restaurants, takeout establishments, delis, and any other similar dining arrangement where food is prepared outside of the home. Food away from home spending remained nearly unchanged in 2024, increasing by just $12.¹³ According to a 2025 report and accompanying survey, 37 percent of polled consumers (44 percent of those classified as lower income in this report) stated that they were dining out less frequently, with over 80 percent in the lower income cohort citing higher prices.¹⁴

Transportation

After increases of 7.1 percent in 2023 and 12.2 percent in 2022, transportation expenditures rose at a much less accelerated rate of 1.1 percent in 2024. Spending on vehicle insurance increased 12.3 percent.¹⁵ This follows an 11.5-percent increase in 2023.¹⁶ Multiple variables have been influencing this rise in vehicle insurance spending, including increased claim severity from auto accidents. According to a 2024 report, bodily injury claims, material damage severity, and total loss claims rose by 20, 47, and 29 percent, respectively, since 2020.¹⁷ In addition to increased claim severity, the report cited higher rates of risky driving behavior: major and minor speeding incidents rose 10 and 16 percent, respectively, and distracted driving rose 10 percent. Lastly, rising vehicle repair costs helped elevate auto insurance rates, likely due to factors including technological advancements in vehicle parts and infotainment, leading to more costly repairs and general labor shortages in the mechanic market.¹⁸

Outside of vehicle insurance, small increases were seen in public and other transportation (3.2 percent). This 3.2-percent increase in public and other transportation was caused by spending on ship fares, which increased by 27.6 percent.¹⁹

Lastly, vehicle purchases declined by 3.6 percent. Used trucks was the only major subcomponent with spending growth (14.8 percent) while spending on new vehicles (both cars and trucks) declined by 14.7 percent.

Healthcare, education, and cash contributions

Healthcare expenditures remained nearly unchanged, only increasing 0.6 percent in 2024. Health insurance rose 0.1 percent, and medical services remained unchanged. Drug expenditures rose 11.3 percent, with a 21.7-percent rise in prescription drug spending.²⁰

Spending on education slowed down sharply from 2023, only rising 2.2 percent compared with 15.0 percent in 2023. Reductions in rate of increase for college and elementary and high school tuition accounted for this slowed spending growth.²¹ Cash contributions declined by 3.6 percent, led by a 27.6-percent decline in charitable donations.

Expenditure shares: how do consumers divide up their spending?

Expenditure shares show how consumers parse out their spending. They are important in understanding short- and long-run spending trends, as well as recognizing changing consumer preferences. In the short run, expenditure shares show how the average consumer divides up their spending among the categories of items. In the long run, expenditure shares reflect changes to living standards.²²

In 2024, the five largest spending components (housing, transportation, food, healthcare, and personal insurance and pensions) accounted for 83.7 percent of spending.²³ The next three largest (entertainment, cash contributions, and apparel and services) accounted for 10.0 percent, down from 2023 (10.4 percent). The other six components made up the remaining 6.3 percent of spending.

How was the division of spending changing in 2024? Housing, personal insurance and pensions, and various miscellaneous expenditures were the only three components that had a larger share of household spending in 2024 than in 2023. Because that money had to shift from somewhere else, six components had reductions in their share of spending. Five components remained unchanged. (See table 4.)

Components with increased shares of spending

Housing occupies the greatest share of spending for the average CU, accounting for 33.4 cents of every dollar spent in 2024. Housing spending shares had declined from 2021 to 2023. However, in 2024 housing shares rose by 0.4 percentage points. This marks the first time that housing shares have risen since the pandemic-driven renovation boom of 2020. The 2024 increase was mainly driven by a 0.6-percentage-point increase in expenditure shares for owned dwellings.²⁴

The heightened share of personal insurance and pensions can be mainly attributed to higher Social Security deductions. The increase within the miscellaneous component was broad, rather than a single line-item expenditure having a major influence.

Components with decreased shares of spending

Expenditure shares for cash contributions, healthcare, transportation, entertainment, apparel and services, and tobacco products and smoking supplies all declined slightly, falling by 0.1 percentage points (except for cash contributions, which fell by 0.2 percentage points). The decline in cash contributions was due to a decline in the share of charitable donations. A reduction in the share of vehicle purchases and gasoline and other fuels contributed to the decline in the share of transportation spending, but an increase in other vehicle expenses partially offset the decrease. The slight decline in healthcare expenditures was due in part to small reductions in the share of spending on health maintenance organization plans and commercial Medicare supplements.

Components with little change

Shares of food (12.9 percent), education (2.0 percent), personal care products and services (1.2 percent), alcoholic beverages (0.8 percent), and reading (0.2 percent) remained unchanged from 2023 to 2024.²⁵

Income and expenditure dynamics by income quintile

Historically, income typically accounts for differences in spending patterns, because if you are paid more you can spend more.²⁶ Those in higher income quintiles, on average, outspend those in lower income quintiles.²⁷ The following section analyzes how five distinct income groups adjusted their spending habits in a dynamic, ever-evolving market.

Income by quintile

Income before taxes increased for all income quintiles except the highest income quintile. As shown in chart 3, income increased the fastest for the lowest income quintile (6.8 percent) and the slowest for the highest income quintile (0.0 percent).

For the third consecutive year (2022, 2023, 2024), income growth in the lowest income quintile equaled or exceeded 6.8 percent, and for the second consecutive year outpaced all other quintiles. The 6.8-percent gain in 2024 was caused by a 9.0-percent uptick in wage and salary income and a 3.2-percent increase in the Social Security cost-of-living adjustment (COLA).²⁸ This growth outpaced the approximately 2.9-percent annual CPI-U increase for 2024. Therefore, all income quintile groups, with the exception of the highest income quintile, experienced real (inflation-adjusted) income gains in 2024.

Expenditures by income quintile

Average annual expenditures rose across all five income quintiles in 2024. (See chart 3.) In contrast to 2023, the lowest income earners’ increase in spending far outpaced that of any other group, at 3.8 percent, while spending growth for the highest quintile increased 0.4 percent. The three middle income quintiles had spending growth between 2.3 and 2.4 percent in 2024.

For the lowest income quintile, there was not one unique component that occupied a majority share of the $1,282 increase. This increase was concentrated in housing, while increases in food, apparel and services, education, and miscellaneous expenditures further contributed to the growth in total expenditures. (See table 5.)

The largest increase in average annual expenditures belongs to the fourth income quintile, at $2,123. For that quintile, $1,423 went toward housing and $794 was spread among food, healthcare, and entertainment.²⁹

CUs in the highest income quintile, on average, reduced spending on half of all major expenditure components with notable exceptions being reading (which increased 44.2 percent) and personal care products and services (which increased 6.8 percent). The total dollar contribution of these two components amounted to an increase of $207, on average.

Summary

In 2024, the average consumer unit (CU) experienced annual inflation of 2.9 percent and spent 1.8 percent more than the previous year in nominal terms (−1.1 percent in real terms). Consumers spent less on entertainment, apparel and services, tobacco products and smoking supplies, and cash contributions than they did in the year before. Housing, personal insurance and pensions, and various miscellaneous expenditures each increased as a share of spending. Inflation-adjusted income before taxes increased for around 80 percent of consumer units, with only the highest quintile not experiencing an increase.