From New Strategist Publications

Reflecting the economic instability affecting so many Americans, the number of households in the United States increased by a tiny 0.4 percent between 2013 and 2014, according to the Census Bureau. In only two of the past 40 years have households grown more slowly (in 2008-09 and 2009-10). The 492,000 households added to the nation's total between 2013 and 2014 is the fourth smallest numerical gain in four decades of tracking the numbers (smaller gains were recorded in 1982-83, 2008-09, and 2009-10).

Also notable, the number of non-Hispanic White households fell slightly between 2013 and 2014. This decline marks only the fourth time in 40 years that the Census Bureau has estimated a drop in the number of non-Hispanic White households.

Nearly one-third of the nation's households are now headed by Blacks, Asians or Hispanics. Black households outnumber Hispanic households by more than 1 million, and they grew faster than Hispanic households between 2013 and 2014 (a 1.8 percent gain for Blacks versus a 1.4 percent gain for Hispanics). Asian households are far less numerous than Black or Hispanic, but they grew by a faster 4.1 percent between 2013 and 2014.

Number (and percent distribution) of Households in 2014  

Total households: 122,952,000 (100.0%)

Non-Hispanic White: 83,641,000 (68.0%) 

Black: 16,855,000 (13.7%)

Hispanic: 15,811,000 (12.8%)

Asian: 6111,000 (5.0%) 

Households Declined in Three Age Groups
The number of households barely increased between 2013 and 2014, according to the Census Bureau's Current Population Survey. That's because of the decline in the number of households headed by people ranging in age from 25 to 54. Here is the change between 2013 and 2014 in the number of households by age of householder.

Change in Households, 2013 to 2014

Total:                    492,000

Under age 25:           9,532

Aged 25 to 34:        -8,994

Aged 35 to 44:     -288,231

Aged 45 to 54:     -258,528

Aged 55 to 64:      233,447

Aged 65-plus:       804,985

The decline in households headed by people aged 35 to 54 is due to the small Generation X moving into those age groups. The increase in households headed by people aged 55 or older is due to the large Baby-Boom generation moving into those age groups. The troubling number, and a sign of economic distress, is the decline in households headed by 25-to-34-year-olds, a group that should be expanding with the Millennial generation.

Another Decline in Household Spending
Average household spending peaked in 2006, just prior to the Great Recession, and has yet to recover. In 2013, the average household spent just $51,100, according to the latest numbers from the Consumer Expenditure Survey. That is 2.1 percent less than the average household spent in 2012 and fully 8.6 percent less than it spent in 2006, after adjusting for inflation. 

Average Household Spending (in 2013 dollars)

2013: $51,100  

2012: $52,196  

2011: $51,477  

2010: $51,397  

2009: $53,280  

2008: $54,626  

2007: $55,770  

2006: $55,926  

The 2012-13 spending decline of 2.1 percent is equal to the decline that occurred between 2007 and 2008, in the midst of the Great Recession.

Most Households Are Spending Less
Average household spending fell 8.6 percent between 2006 (the peak year) and 2013, after adjusting for inflation – from $55,926 to $51,100. According to a Demo Memo analysis of the Consumer Expenditure Survey, only 16 percent of the $4,826 decline in average household spending during those years was due to the aging of the population – a consequence of the large Baby-Boom generation getting older, retiring and reducing its spending.

Most of the decline in average household spending was due to budget cutting in all but the oldest age group. Here is average household spending in 2013 by age of householder (and percent change since the peak year of 2006 – in 2013 dollars). 

Average Household Spending

Total households: $51,100 (-8,6%) 

Under age 25: $30,373 (-6.7%)

Aged 25 to 34: $48,087 (-12.5%)

Aged 35 to 44: $58,784 (-11.5%)

Aged 45 to 54: $60,524 (-9.0%)

Aged 55 to 64: $55,892 (-4.8%)

Aged 65-plus: $41,403 (+2.2%)

In dollar terms, households headed by people aged 35 to 44 cut their spending the most. In 2013, those households spent a substantial $7,632 less than they did in 2006, after adjusting for inflation.

Spending Trends by Region
According to the latest data from the Consumer Expenditure Survey, the Northeast is the only region in which average household spending in 2013 exceeded spending in 2006 (the peak spending year, nationally), after adjusting for inflation. Here is average household spending by region in 2013 (and percent change since the peak year of 2006 – in 2013 dollars). 

Average Household Spending

Total households: $51,100 (-8.6%)

Northeast: $57,027 (+0.4%)

Midwest: $50,527 (-3.1%)

South: $45,956 (-10.6%)

West: $55,460 (-16.5%)

Households in the Northeast are now the biggest spenders. At the other extreme, households in the South spend the least and are losing ground. In dollar terms, the household spending gap between the Northeast and South has more than doubled, rising from $5,388 in 2006 to $11,071 in 2013.

— Cheryl Russell
New Strategist Publications
demographics@newstrategist.com