Consumer spending facts for kids

Consumers can buy a huge range of goods and services at shopping malls.

Consumer spending is all about people buying things! It's when families and individuals spend their money on goods and services they need or want. Think about buying new clothes, getting groceries, or going to the movies – that's all consumer spending. It's a super important part of how a country's economy works.

In a big picture view of the economy, called macroeconomics, consumer spending is the largest part of something called aggregate demand. Aggregate demand is the total demand for all goods and services in a country.

There are two main types of consumer spending:

• Induced consumption: This is the spending that changes when people's income changes. If you earn more money, you might spend more.
• Autonomous consumption: This is the spending that happens no matter what your income is. Even if you don't have much money, you still need to buy basic things like food.

What Do People Spend Money On?

People spend money on a huge variety of things every day. These can be grouped into different categories.

Durable Goods

Durable goods are things that last a long time, usually three years or more. When you buy these, you expect to use them for a while.

• Vehicles: Like cars, motorcycles, or even bicycles.
• Home items: Such as furniture, refrigerators, televisions, and other things for your house.
• Fun stuff: This includes things like video game consoles, sporting equipment, or toys.

Nondurable Goods

Nondurable goods are items that don't last very long. You use them up quickly, often in less than three years.

• Food and drinks: Everything from grocery items to snacks and drinks you buy.
• Clothes and shoes: Things you wear every day.
• Energy: Like gasoline for cars or electricity to power your home.
• Other items: This can include things like medicines or cleaning supplies.

Services

Services are things that people do for you, rather than physical items you can hold.

• Housing and utilities: Paying for your home, and things like water, electricity, and heating.
• Healthcare: Visiting a doctor, getting medicine, or going to the hospital.
• Transportation: Using buses, trains, or airplanes to travel.
• Fun activities: Going to the movie theater, a concert, or a theme park.
• Food services: Eating at restaurants or getting takeaway food.
• Financial help: Services from banks or insurance companies.
• Other services: This can be anything from getting a haircut to having your car repaired.

Images for kids

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  Household spending United States

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  Consumer Expenditure per Person Surveys (CE) 2019 Annual Report Data