Oil boom and housing bust alter US spending trendsap file photo
A man examines a row of washers and dryers while shopping at a Sears store in Henderson, Nev. in 2012. Consumer spending has recovered at a much slower pace in states with big housing busts.
WASHINGTON — North Dakotans, enriched by an oil boom, stepped up their spending at triple the national pace in the three years that followed the Great Recession. In Nevada, smacked hard by the housing bust, consumers barely increased their spending.
Americans spend the most, per person, on housing in Washington, D.C., and the least in West Virginia.
Those and other figures emerged Thursday from a new annual report from the government that for the first time reveals consumer spending on a state-by-state basis from 1997 through 2012. The numbers point to substantial shifts in the economy since the recession ended.
The changes in spending patterns in North Dakota have been particularly dramatic. Its per-capita spending in 2007, before the recession began, was $32,780. That ranked it 24th among states. By 2012, North Dakota’s per-capita spending was $44,029, fourth-highest nationwide. (The figures aren’t adjusted for inflation.)
North Dakota has boomed in large part because of a breakthrough drilling technique, known as hydraulic fracturing, or “fracking,” that has unlocked vast oil and gas reserves.
By contrast, spending eked out a scant 3.5 percent increase in Nevada, the weakest for any state and far below the 10.7 percent national average. Arizona’s 6.2 percent increase was next-weakest, followed by Hawaii’s, Florida’s and Utah’s.
When the housing bust struck in 2006, home values plummeted in Nevada, Arizona and Florida. The persistently weak consumer spending in those states underscores the lingering damage the housing bust inflicted on their economies.
The government’s figures show that state-by-state spending patterns were radically different before the recession. In the three years leading up to the downturn, for example, spending in Arizona jumped 21.2 percent, the fourth-highest in the nation. Big home price gains during the housing bubble likely fueled more spending.
Spending rose the most in Wyoming, where it surged 24.5 percent, followed by Louisiana and Hawaii.
The report points to wide spending disparities elsewhere in the country. Per-person spending in 2012 was highest in Washington, D.C., at $59,423, followed by Massachusetts at $47,308. The next-highest per-person spending totals were in Connecticut, North Dakota and New Jersey.
Spending was lowest that year in Mississippi, at $27,406. Arkansas was second-lowest, at $28,366.
The government’s new report includes figures for specific spending categories. For example, in 2012, consumers spent the most on housing and utilities in Washington, D.C., where per-capita spending reached $11,985, followed by Hawaii at $10,002. Connecticut and Maryland ranked third and fourth. Those figures largely reflect high rents in those areas.
The individual categories of spending data tend to coincide with regional cost-of-living differences. Consumers in Alaska, where food costs are generally high, spent the most on groceries, laying out $3,852 in 2012, followed by Vermont at $3,622, followed by New Hampshire, $3,616, and Hawaii, $3,615.MORE IN World/National BusinessAetna aims to spend about $35 billion to buy rival Humana and become the latest health insurer... Full StoryWASHINGTON — Even after another month of strong hiring in June and a sinking unemployment rate,... Full StoryCentene has jumped into the mix of managed-care companies scrambling to bulk up as the health... Full Story
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