While Hispanics have median household income that’s about 20% lower than the overall median average, their sheer size means that they’re approaching $1 trillion in aggregate household income this year. That’s according to a new report from Geoscape [download page], which looks at multicultural trends in the US.
The median household income for Hispanics this year is estimated to be close to $45k, below the $57k average. (More household income stats here.) Almost one-fifth (19%) of the US population identifies as Hispanic, and two-thirds of the Hispanic population hail from Mexico.
US Census Bureau data indicates that more than one-quarter of Americans under the age of 14 are Hispanic. In the Los Angeles DMA, meanwhile, half of pre-schoolers (ages 0-4) will be Hispanic by 2022, according to Geoscape’s report.
Hispanics’ size and aggregate household income translates to purchasing power: this year, total Hispanic household consumer expenditures will exceed $815 billion. Past research has found that Hispanics spend more on a daily basis than other cultural groups, and the Geoscape report indeed shows that as a percentage of total household income, Hispanics will spend more than Asians and Blacks this year.
Black Americans have the lowest median household incomes of these groups, at around $37.3k. That’s almost one-third lower than the US average. Nevertheless, Black Americans exceed $784 billion in total household income, and are expected to total more than $640 billion in household spending this year.
Finally, Asian households have easily the highest median household incomes. At almost $79k, they’re more than one-third higher than the national average.
That pushes aggregate income for Asian households to almost $544 billion, with total consumer spending projected to reach almost $403 billion.
Unlike Hispanics, Asian-Americans tend to have a much more varied mix of origin countries. The largest proportion (23.9%) are Chinese and Taiwanese, followed by Asian Indians (19%), Filipinos (18.2%), Koreans (10.8%) and Vietnamese (10.7%).
Top Spending Categories
In terms of total annual expenditures, Hispanics are expected to spend the most this year on Shelter & Insurance, Food & Beverages, Transportation and Personal Insurance.
Interestingly, while Shelter & Insurance is also the top-spending category for Blacks and Asians, both groups will spend more on Transportation than on Food & Beverages.
In fact, aggregate Hispanic spending on Food & Beverages is about equal to aggregate spending on Food & Beverages by Blacks and Asians, combined.
Perhaps it’s no surprise, then, that the categories in which Hispanics over-index the most in spending are largely tied to food:
- Beef (index of 132);
- Poultry (130);
- Rice (123);
- Apparel (120);
- Flour (118);
- Fresh Fruits (118); and
- Fresh Vegetables (115).
For Asian Americans, the top-indexing categories include Rice (318), Education (295), Seafood (204) and Fresh Vegetables (157), with Apparel (126) also in the mix.
Asian Households “Worth” The Most
As a function of their remaining life spans (life expectancy minus median adult age) and household spending, Asian and Hispanic households will spend more over their remaining lifespans than Black and White households, according to the report. In fact, the average Asian household will spend $1 million more than the average non-Hispanic White household over their remaining lifetimes, with the average Hispanic household spending $625k more.
This exemplifies the importance of acquiring brand-loyal households in these cultural segments, according to the study.
As for cumulative lifetime spending:
- Hispanics will top Asians for spending on Food at Home over their remaining lifespans;
- Hispanics will narrowly edge Asians for cumulative spending on Household Furnishings & Equipment and Transportation;
- Hispanics have the highest possible spending on Apparel; while
- Asian households will spend the most on Entertainment and Personal Care Products & Services.
The report is available via registration, here.