REAL ESTATE TOPICS...What Americans Spent More on Last Year: Housing, Health Care

North Dakota posted the biggest rise in spending on housing and utilities, at 8%. The state economy boomed in recent years amid a revolution in oilfield technology. But persistently low crude prices have spurred layoffs and a curtailed investment this year.

 

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Consumer spending grew broadly but unevenly across the U.S. last year, driven largely by housing and utilities, health care, and other services.

A new Commerce Department report out Tuesday showed personal-consumption expenditures ranged from a robust 7.4% increase in North Dakota to a more muted 2.1% rise in West Virginia. Nationwide, spending was up 4.2% last year versus 3.1% in 2013.

The data only partially captures a big drop in oil prices–it shows spending on gasoline down across the country but likely wouldn’t reflect layoffs and a slowdown in investment across the energy sector, which didn’t fully materialize until this year.

But the figures help confirm the uneasy sense that outlays on essentials–such as housing–are at least partly squeezing out some discretionary spending. The Commerce Department said housing and utilities and health care accounted for almost one-third of the rise in consumer spending nationwide in 2014.

Consumer spending has been particularly muted in recent months, a potential weight on economic growth. Personal consumption accounts for about two-thirds of economic output.

Those are also areas with relatively strong inflation. At the end of 2014, the consumer-price index was up 3% from a year earlier for medical care and 2.5% for housing while overall inflation had climbed only 0.8%.

Across all states, spending on housing and utilities grew 4.1% in 2014, with North Dakota posting the biggest rise at 8%. The state economy boomed in recent years amid a revolution in oilfield technology. But persistently low crude prices have spurred layoffs and a curtailed investment this year.

After North Dakota, Colorado and Texas saw the biggest rises in overall consumer spending. After West Virginia, Missouri and Kentucky has the slowest growth.

The Commerce Department report is meant to help understand trends in regional economies.