Midwest Information Office

Internet: www.bls.gov/ro5/
GENERAL INFORMATION: (312) 353-1880	FOR RELEASE:
MEDIA CONTACT: Paul LaPorte	Thursday, March 5, 2009
(312) 353-1138

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CONSUMER SPENDING PATTERNS IN THE CLEVELAND METROPOLITAN AREA, 2006-2007

Consumer units 1/ in the Cleveland-Akron, Ohio metropolitan area spent an average of $47,890 per year in 2006-2007, according to results from the Bureau of Labor Statistics’ Consumer Expenditure Survey.  Regional Commissioner Jay A. Mousa noted that this figure was 2.8 percent lower than the $49,279 average expenditure level for a typical household in the United States. Although households in the Cleveland area spent less than the U.S. average, they tended to allocate their shares of total expenditures similarly among the major categories with a few exceptions, most notably, health care.  (See chart A.)

 

This report contains annual data averaged over a two-year period, 2006 and 2007.  The data are from the Consumer Expenditure Survey (CE), which is conducted on an ongoing basis by the U.S. Census Bureau for the Bureau of Labor Statistics (BLS).  The CE is the only national survey that provides both complete data on household expenditures and the demographic characteristics of those households.  Data from the CE are available for the nation, the 4 geographic regions of the country, and 18 metropolitan areas.  Survey data cannot be used to make cost of living comparisons between areas.  Expenditures vary among areas not only because of economic factors such as the prices of goods and services and family income, but also because of differences such as the age of the population, climate, consumer tastes, family size, etc.  However, expenditure shares, or the percentage of a consumer unit’s budget spent on a particular category, can be used to compare spending patterns across areas.  The survey provides average expenditures for consumer units.  An individual consumer unit may spend more or less than the average, depending on its particular characteristics.

Housing, the largest expenditure category, accounted for 34.7 percent of the average Cleveland area household’s total budget; this share was not significantly different from the 33.9-percent national average (see table 1).  Among other metropolitan areas in the Midwest region, expenditure shares for housing were also similar to that for the nation in Minneapolis (34.7 percent) and Detroit (33.1 percent), but significantly higher than average in Chicago (35.3 percent).  Overall, 10 of the 18 published metropolitan areas had expenditure shares for housing significantly above the U.S. average and 1 (Houston) had a lower-than-average share.  (See chart 1).

The majority of housing expenditures in Cleveland went toward shelter (58.5 percent), which includes mortgage interest, property taxes, repairs, and rent, among other items; this was about the same as the 59.0 percent spent nationally.  (See table A.)  Utilities, fuels, and public services expense accounted for 22.7 percent of total housing expenditures in Cleveland; nationally, they made up 20.6 percent.  The rate of homeownership in Cleveland, 68 percent, was close the national average of 67 percent.  Among the other three areas chosen for comparison, the homeownership rate in Detroit and Minneapolis (73 percent) was higher than the national average, as was the homeownership rate in Chicago (71 percent).

 

Table A. Percent distribution of housing expenditures, United States and selected metropolitan areas, Consumer Expenditure Survey, 2006-2007

Category	United States	Cleveland	Chicago	Detroit	Minneapolis
Total housing	100.0	100.0	100.0	100.0	100.0
Shelter	59.0	58.5	62.3	59.8	55.5
Utilities, fuels & public services	20.6	22.7	18.6	22.7	15.8
Household operations	5.8	4.7	5.3	3.8	13.8
Housekeeping supplies	3.8	3.4	3.2	4.0	2.7
Household furnishings	10.7	10.7	10.6	9.7	12.2
Note: Columns may not add to 100 due to rounding.

 

At 17.5 percent of the total budget, transportation was the second-largest expenditure category in the Cleveland area, not statistically different from the national average of 17.7 percent.  Like Cleveland, households in Detroit (18.1 percent) allocated a similar share of their budgets to transportation when compared to the national average.  However, consumer units in Chicago (15.4 percent) and Minneapolis (14.5 percent) spent significantly smaller shares of their budgets than the nation on transportation. (See chart 2.)

Of the $8,371 annual expenditure for transportation in Cleveland, 97.0 percent was spent buying and maintaining private vehicles; this compared to the national average of 94.0 percent.  (See table 2 for detailed expenditure levels.)  The average number of vehicles owned per household in Cleveland was 2.1, above the national average of 1.9.  Households in Minneapolis (2.2) and Detroit (2.0) also had higher rates of average vehicle ownership, whereas those in Chicago (1.8) were lower than the national average.

The remaining 3.0 percent of a Cleveland household’s transportation budget was spent on public transit, which includes fares for taxis, buses, trains, and planes.  Nationwide, households spent 6.0 percent of their transportation dollars on public transit.  The percentage of the transportation budget spent on public transportation in Detroit was 5.0 percent, 7.5 percent in Minneapolis, and 9.1 percent in Chicago.  (See table B.)  

 

Table B. Percent distribution of transportation expenditures, United States and selected metropolitan areas, Consumer Expenditure Survey, 2006-2007

Category	United States	Cleveland	Chicago	Detroit	Minneapolis
Total transportation	100.0	100.0	100.0	100.0	100.0
Vehicle purchases (net outlay)	38.1	39.4	34.9	25.2	42.4
Gasoline and motor oil	26.4	26.0	26.2	29.8	24.7
Other vehicle expenses	29.5	31.6	29.8	40.1	25.4
Public transportation	6.0	3.0	9.1	5.0	7.5
Note: Columns may not add to 100 due to rounding.

 

The portion of a Cleveland consumer unit’s budget spent on food, 11.5 percent, was not significantly different from the 12.4-percent U.S. average.  Among the other three Midwest metropolitan areas, households in Chicago (12.6 percent) and Minneapolis (11.4 percent) also allocated expenditure shares similar to that of the nation.  On the other hand, a typical Detroit household (13.5 percent) spent a significantly larger share of their total budget on food.

 
Households in Cleveland spent $3,331, or 60.4 percent, of their food dollars on food at home and the remaining 39.6 percent on food away from home, such as restaurant meals, carry-outs, board at school, and catered affairs.  In comparison, the average U.S. household spent 56.2 percent of its food budget on food at home and 43.8 percent on food away from home.  Among the other three Midwest metropolitan areas being compared, consumers in Detroit spent 40.7 percent of their food budget on food away from home, while households in Chicago and Minneapolis spent 43.8 and 43.9 percent, respectively.

Payments for personal insurance and pensions accounted for 9.8 percent of the typical Cleveland household’s budget, measurably less than the 10.8-percent share allocated nationally.  Consumer units in Minneapolis (11.0 percent), Chicago (10.9 percent), and Detroit (10.4 percent) had expenditure shares that were not significantly different from the national average.

Out-of-pocket health care expenses--which include health insurance premiums, medical services, drugs (prescription and nonprescription), and medical care supplies--accounted for 6.9 percent of total household expenditures in Cleveland, significantly more than the 5.7 percent recorded nationwide.  Average expenditures in Chicago (5.3 percent) and Detroit (4.8 percent) for out-of-pocket health care expenses were significantly less than the national average, whereas average expenditures in Minneapolis (6.2 percent) were not measurably different.

Spending on apparel and services accounted for 4.7 percent of total expenditures in Cleveland, not statistically different from the 3.8-percent national average.  Among the other three areas, only households in Chicago (5.3 percent) spent significantly more than the national average.

Cleveland area households allocated a not significantly different share (4.7 percent) of their budget to entertainment compared to the national average (5.4 percent).  Like Cleveland, spending on entertainment was in-line with the national average in Minneapolis (6.6 percent) and Detroit (5.0 percent).

Cash contributions accounted for 3.3 percent of an average consumer unit’s spending in Cleveland, statistically similar to the national average of 3.7 percent.  Shares for cash contributions were also not significantly different than the national average in Minneapolis (4.9 percent) and Detroit (3.1 percent), but were significantly lower in Chicago (2.8 percent).

As noted, Cleveland-Akron is 1 of 18 areas nationwide for which Consumer Expenditure data are available.  We encourage users interested in learning more about the Consumer Expenditure Survey to contact the Chicago Information Office at (312) 353-1880.  Metropolitan area CE data and that for the four geographic regions and the United States are available on our Web site at www.bls.gov/ro5/.

Changes in 2007

In 2007 there were a number of revisions to the survey questionnaires to capture new products and services that are available to consumers.  This was the latest in a series of periodic revisions to keep the surveys current with changes in the marketplace.  Also for 2007, a number of expenditure items changed survey source from the Interview Survey to the Diary Survey or vice versa.  Due to the overlap in the item coverage between the two surveys, the survey source is periodically reviewed and statistical methods are used to select the best source.

 

1/ See the Technical Note for the definition of a consumer unit.  The terms consumer unit and household are used interchangeably throughout the text for convenience.

 

Technical Note

 

The current Consumer Expenditure Survey (CE) program began in 1980.  Its principal objective is to collect information on the buying habits of American consumers.  The consumer expenditure data are used in a wide variety of research by government, business, labor, and academic analysts.  The data are also required for periodic revision of the Consumer Price Index (CPI).

The survey consists of two components, a diary or recordkeeping survey, and an interview survey.  The Diary Survey, completed by participating consumer units for two consecutive 1-week periods, collects data on frequently-purchased smaller items.  The Interview Survey, in which the expenditures of consumer units are obtained in five interviews conducted every 3 months, collects data for larger-cost items and expenditures that occur on a regular basis.  The U.S. Census Bureau collects the survey data.

Each component of the survey queries an independent sample of consumer units which is representative of the U.S. population. Over the year, about 7,000 consumer units are sampled for the Diary Survey.  The Interview Survey is conducted on a rotating panel basis, with about 7,000 consumer units participating each quarter.  The data are collected on an ongoing basis in 91 areas of the country.

The integrated data from the BLS Diary and Interview Surveys provide a complete accounting of consumer expenditures and income, which neither survey component alone is designed to do.  Due to changes in the survey sample frame, metropolitan area data in this release are not directly comparable to those prior to 1996.

The expenditure data in this release should be interpreted with care. The expenditures are averages for consumer units with the specified characteristics, regardless of whether or not a specific unit incurred an expense for that specific item during the recording period.  The average expenditure may be considerably lower than the expenditure by those consumer units that purchased the item.  This study is not intended as a comparative cost of living survey, as neither the quantity nor the quality of goods and services has been held constant among areas.  Differences may result from variations in demographic characteristics such as consumer unit size, age, preferences, income levels, etc.  Users should keep in mind that prices for many goods and services have risen since the survey was conducted.

In addition, sample surveys are subject to two types of errors.  Sampling errors occur because the data are collected from a representative sample rather than the entire population.  Nonsampling errors result from the inability or unwillingness of respondents to provide correct information, differences in interviewer ability, mistakes in recording or coding, or other processing errors.  The year-to-year changes are volatile and should be interpreted carefully.  Sample sizes for the metropolitan areas are much smaller than for the nation, so the U.S. estimates and year-to-year changes are more reliable than those for the metropolitan areas.

Some expenditure components are subject to large fluctuations from one year to the next because these components include expensive items that relatively few consumers purchase each year.  Thus, shifts from year to year in the number of consumers making such purchases can have a large effect on average expenditures.  Examples of these types of expenses are purchases of new cars and trucks in the transportation component, and spending on boats and recreational vehicles in the entertainment component.

The CE significance tests in this release compare expenditure shares for the 14 major expenditure categories in the United States to expenditure shares in selected metropolitan areas (areas in this release are listed below).  Expenditure shares for housing and transportation that are above or below that for the nation after testing for significance at the 95-percent confidence interval are identified in charts 1 and 2 for the 18 metropolitan areas surveyed.

NOTE:  A value that is statistically different from another does not necessarily mean that the difference has economic or practical significance.  Statistical significance is concerned with our ability to make confident statements about a universe based on a sample.  It is entirely possible that a large difference between two values is not significantly different statistically, while a small difference is, since both the size and heterogeneity of the sample affect the relative error of the data being tested.

Metropolitan areas definitions are based on Core-Based Statistical Areas defined by the U.S. Office of Management and Budget.  The metropolitan areas and their component counties and cities discussed in this release are:

Chicago-Gary-Kenosha, Ill.-Ind.-Wis. includes the counties of Cook, De Kalb, Du Page, Grundy, Kankakee, Kane, Kendall, Lake, McHenry, and Will in Illinois; Lake and Porter in Indiana; and Kenosha in Wisconsin;

Cleveland-Akron, Ohio includes the counties of Ashtabula, Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, and Summit;

Detroit-Ann Arbor-Flint, Mich. includes the counties of Genesee, Lapeer, Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne;

Minneapolis-St. Paul, Minn.-Wis. includes the counties of Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright in Minnesota; Pierce and St. Croix in Wisconsin.

 

Definitions

 

Consumer unit - members of a household related by blood, marriage, adoption, or other legal arrangement; a single person living alone or sharing a household with others but who is financially independent; or two or more persons living together who share responsibility for at least 2 out of 3 major types of expenses - food, housing, and other expenses.  The terms household or consumer unit are used interchangeably for convenience.

Expenditures - consist of the transaction costs, including excise and sales taxes, of goods and services acquired during the interview or recordkeeping period.  Expenditure estimates include expenditures for gifts, but exclude purchases or portions of purchases directly assignable to business purposes.  Also excluded are periodic credit or installment payments on goods or services already acquired.  The full cost of each purchase is recorded even though full payment may not have been made at the date of purchase.

Income before taxes - the total money earnings and selected money receipts during the 12 months prior to the interview date.

 

 

Table 1. Consumer unit characteristics and percent distribution of expenditures, U.S. and selected metropolitan areas, Consumer Expenditure Survey, 2006-2007

Item	United States	Cleveland	Chicago	Detroit	Minneapolis
Consumer unit characteristics:
Income before taxes	$61,820	$62,104	$75,463	$58,414	$76,772
Age of reference person	48.8	53.0	49.6	49.3	48.1
Average number in consumer unit:
Persons	2.5	2.5	2.6	2.4	2.3
Children under 18	0.6	0.6	0.7	0.6	0.5
Persons 65 and over	0.3	0.3	0.3	0.3	0.3
Earners	1.3	1.4	1.4	1.3	1.4
Vehicles	1.9	2.1	1.8	2.0	2.2
Percent homeowner	67	68	71	73	73
Average annual expenditures	$49,279	$47,890	$57,304	$48,348	$60,059
Total (percent):	100.0	100.0	100.0	100.0	100.0
Food	12.4	11.5	12.6	13.5	11.4
Alcoholic beverages	1.0	0.8	1.4	1.0	1.5
Housing	33.9	34.7	35.3	33.1	34.7
Apparel & services	3.8	4.7	5.3	3.8	3.7
Transportation	17.7	17.5	15.4	18.1	14.5
Health care	5.7	6.9	5.3	4.8	6.2
Entertainment	5.4	4.7	4.8	5.0	6.6
Personal care products & services	1.2	1.2	1.2	1.2	1.1
Reading	0.2	0.3	0.2	0.2	0.3
Education	1.9	2.1	2.9	2.7	1.8
Tobacco products & smoking supplies	0.7	0.8	0.5	0.9	0.5
Miscellaneous	1.7	1.7	1.5	2.0	1.9
Cash contributions	3.7	3.3	2.8	3.1	4.9
Personal insurance & pensions	10.8	9.8	10.9	10.4	11.0
Note: Numbers may not add to 100 due to rounding.

 

Table 2. Average annual expenditures, U.S. and selected metropolitan areas, Consumer Expenditure Survey, 2006-2007

Item	United States	Cleveland	Chicago	Detroit	Minneapolis
Average annual expenditures:	$49,279	$47,890	$57,304	$48,348	$60,059
Food	6,122	5,514	7,202	6,550	6,848
Food at home	3,441	3,331	4,046	3,886	3,845
Cereals and bakery products	453	422	537	579	517
Meats, poultry, fish and eggs	787	934	932	871	703
Dairy products	378	320	406	420	475
Fruits and vegetables	596	531	713	635	731
Other food and home	1,227	1,125	1,457	1,381	1,419
Food away from home	2,681	2,183	3,156	2,663	3,003
Alcoholic beverages	477	401	801	495	928
Housing	16,684	16,602	20,238	15,995	20,819
Shelter	9,849	9,719	12,612	9,568	11,559
Owned dwellings	6,624	6,269	9,043	7,077	8,592
Rented dwellings	2,596	2,773	2,680	1,841	2,222
Other lodging	629	678	889	650	745
Utilities, fuels & public services	3,437	3,768	3,761	3,637	3,294
Household operations	966	775	1,063	602	2,871
Housekeeping supplies	639	561	654	642	562
Household furnishings & equipment	1,793	1,778	2,146	1,545	2,533
Apparel & services	1,893	2,241	3,019	1,848	2,193
Transportation	8,737	8,371	8,846	8,743	8,694
Vehicle purchases (net outlay)	3,332	3,296	3,084	2,201	3,689
Gasoline & motor oil	2,306	2,177	2,322	2,602	2,151
Other vehicle expenses	2,577	2,644	2,635	3,506	2,204
Public transportation	521	253	806	433	649
Healthcare	2,810	3,293	3,020	2,307	3,705
Entertainment	2,637	2,250	2,740	2,441	3,952
Personal care products and services	586	571	662	570	647
Reading	117	154	130	113	156
Education	917	1,010	1,644	1,325	1,079
Tobacco products & smoking supplies	325	398	291	445	320
Miscellaneous	827	815	837	985	1,149
Cash contributions	1,845	1,557	1,663	1,500	2,953
Personal insurance & pensions	5,303	4,713	6,241	5,031	6,615
Life & other personal insurance	316	429	352	318	283
Pensions & Social Security	4,987	4,285	5,889	4,713	6,332

 

 

Chart 1. Expenditure shares spent on housing in all 18 metropolitan statistical areas compared to the U.S. average, Consumer Expenditure Survey, 2006-2007

Note: Statistical significance testing at the 95 percent confidence interval.

 

Chart 2. Expenditure shares spent on transportation in all 18 metropolitan statistical areas compared to the U.S. average, Consumer Expenditure Survey, 2006-2007

Note: Statistical significance testing at the 95 percent confidence interval.

 

 

Last Modified Date: March 6, 2009