Consumer-Spending Growth Crashed in Nevada After the Recession – Real Time Economics


Consumer spending went bust in Nevada like nowhere else in the country.

In the five years leading up to the recession that began in 2007, the Silver State had the largest increase in personal consumption expenditures, rising 61%.

In the following five years, through 2012, no state had a weaker gain than Nevada’s 1%, according to state-level data the Commerce Department released for the first time Thursday.

Other western states saw consumer spending slow sharply as well. Personal consumption in Arizona rose 55% from 2002 through 2007, and just 5% from 2008 through 2012. California consumer spending rose 36% before the recession and just 9% after it began.

The data offers some clues as to why the recovery has been uneven across the country. Those three states ranked among the top ten in unemployment in June according to the Labor Department. In the U.S., consumer spending accounts for about two-thirds of the total economy. States with weak gains appear likely to struggle to add jobs and grow their economies.

Mississippi, Michigan and Rhode Island followed Arizona and Nevada with the weakest consumer spending increases from 2008 through 2012. Mississippi and Rhode Island are tied for the highest unemployment rates in the country, while Michigan is fourth, behind Nevada.

Only one state had stronger spending after the recession than before: oil-rich North Dakota. That state also boasts the lowest unemployment rate at 2.7% in June.

The state-specific consumer spending data comes from a new “prototype” report from the Commerce Department. The department will seek input on the numbers it released Thursday and evaluate its process before a planned “official” release sometime next year.

Among the other findings in the report:

  • Massachusetts was the state with the highest per-capita spending in 2012 at $47,308. Connecticut, $45,800, and North Dakota, $44,029, followed.
  • Hawaii was the state with the highest per-capita spending on housing and utilities in 2012 at $10,002. Mississippi had the smallest housing outlays at $4,294, just ahead of Texas at $4,391.
  • Massachusetts and Alaska had the highest per-capita spending on health care, averaging above $8,000 in 2012. Nevada and Utah had the smallest health-care spending at less than $4,500.
  • Spending on gasoline and other non-utility energy was the smallest in states with relatively high overall costs of living. Consumers in Hawaii spent the least on energy, an average of $882 per year. New York, Florida and California followed. North Dakotans spend the most on gasoline and other energy in 2012, almost $4,000 per person.

See how your state ranked in consumer spending growth:



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7 August 2014 | 4:03 pm – Source:

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