Nationwide discretionary spending was estimated to total $1.77 trillion in the Summer of this year, according to data provided to MarketingCharts by Experian Marketing Services from its latest national consumer study. While the discretionary spending estimate (DSE) for this Summer is up from the same time last year ($1.6 trillion) and the year before ($1.5 trillion), it’s been a bumpier ride this past year nationally than for Hispanics.
Looking first at nationwide trends during the past year, the Experian data indicates that Summer’s $1.77 trillion DSE is down from $1.8 trillion in the Spring, while being roughly on par with the $1.76 trillion estimate for Winter 2013 and the $1.75 trillion estimate for Fall 2012. (It’s worth noting that these figures are not adjusted for inflation.)
By contrast, total DSE for Hispanic households has grown during each quarter. At $193 billion in this latest study, Hispanic DSE is up from $184 billion in the Spring study, $182 billion in the Winter study, and $174 billion in the Fall 2012 study. Moreover, Hispanic DSE has been growing swiftly on a year-over-year basis, with this year’s Summer estimate of $193 billion being $24 billion (14.2%) higher than in 2012 ($169 billion), which in itself was $25 billion (17.4%) higher than a year earlier ($144 billion in Summer 2011).
As a result, Hispanics now represent 10.9% of nationwide discretionary spending, up from roughly 10.6% in 2012 and 9.6% the year before. (Given the non-linear trends nationwide, Hispanics’ share of total DSE has been up and down during the past year.)
Hispanics’ share of total DSE still trails their population share (recently estimated to be 17%), likely as they skew younger than the general population with a lower median household income. But the data signals something of a recovery for Hispanics, who were hit harder than blacks or whites by the Great Recession, losing an average 44% of their wealth (measured as total assets minus total liabilities and debts), according to a study earlier this year from the Urban Institute. Despite the recession having exacerbated the wealth gap between whites (who lost an average 11% of their wealth) and minorities (blacks lost on average 31% of their wealth), demographic trends mean that over their remaining lifetimes, Hispanic households will actually outspend white households, according to a Geoscape report released earlier this year.
Forecasts suggest that by 2018, Hispanics will account for 19% of the population, while by 2060, they will account for almost one-third of the population. Given those trends, Hispanics’ discretionary spending estimates will likely only rise in the years to come.
About the Data: The DSE is part of the Simmons National Consumer Study; it’s a dollar estimate of a household’s annual spend on discretionary or non-essential items and services, such as apparel, furniture, dining out, education, reading materials, entertainment, etc. The DSE is based on a combination of Experian data, the latest available macro econometric data (such as retail sales, unemployment, housing estimate and other key drivers of the U.S. economy), and the national survey on consumer spending. The variable is a modeled variable (i.e.: not self-reported) to respondents of the Simmons National Consumer Study using proprietary analytics and statistical modeling.