What Consumers Spent a Record $18.86 Trillion On

Consumers spent more in fall 2023 than the previous year due to a spike in prices for energy, financial services, food services, housing, and clothing, study shows.

Shopping bags in the back of the car
(Image credit: Getty Images)

Although threats of a recession still loom, consumers didn’t hold back this Black Friday and Cyber Monday with early reports indicating record sales this year. In fact, consumers spent a record $18.86 trillion in October 2023 on an annualized basis, according to WalletHub’s Consumer Spending Report. That is $4.04 billion more in October than in September, marking the eighth-largest October increase since 2010.

However, as consumer spending is a fundamental economic metric that provides insights into the economy's overall strength and U.S. household balance sheets, and the fact that credit card debt currently stands at $1.079 trillion, breaking shopping records might be viewed as a bit problematic for many families. 

It’s fair to wonder where the record will stand at the end of 2023 and how ugly things will get for household finances. “We saw a $48.5 billion jump in spending from September to October alone, and we’re expecting the last few months of the year to continue this trend,” said John Kiernan, WalletHub editor. “Despite monthly totals setting records, recent spending does not seem unusually reckless, considering that metrics such as the ratio between spending and income align with historical averages.”

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What did they spend it on?

Rising energy costs sapped consumers the most, with spending increasing 4.1% from a year ago, reflecting the impact of inflation. 

After energy, the biggest quarter-over-quarter gainers were financial services and insurance up 1.9%, food services and accommodations up 1.4%, housing and utilities up 1.2%, and clothing and footwear up 1.1%.

Key takeaways From the Latest Consumer Spending Data:

  • Spending-to-Income Ratio: The ratio of spending to personal income was 81.16% in October 2023, which is in line with pre-pandemic levels.
  • Tendency to Consume: Marginal propensity to consume, which shows how much consumers will spend for each additional dollar earned, was at 0.7 for the month of October — slightly below the historical average.
  • Spending-to-Assets Ratio: The ratio between spending and assets has been steadily improving, dropping to 10.62% in Q3 2023, which is about 21% below the peak since 2010.
  • Consumer Spending & GDP: At the end of Q3 2023, consumer spending accounted for 67.69% of total GDP, which is 0.15% above the average from the past 23 years.
  • Top Spending Categories: The category in which consumer spending increased the most during Q3 2023 was energy, which increased by 4.1%. The category in which spending decreased the most was motor vehicles/parts, which decreased by 1.8%.
  • Record Consumer Spending: Consumers spent $48.5 billion more in October than in September.
  • Pricey Projection for November & December: Based on the study, WalletHub projected that consumers will spend a total of $38 trillion during the final two months of the year.

If you evaluate your personal finances and find it may be time to reign in spending or get out from under expensive debt in the New Year, there are steps you can take: Make a budget for 2024 and stick to it, pay off high-interest debt on time, and consolidate what you owe to make your monthly payments more manageable. 

WalletHub’s consumer spending report is based on the latest data on personal consumption expenditures, personal income, and gross domestic product available from the Bureau of Economic Analysis and the U.S. Bureau of Labor Statistics.

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Kathryn Pomroy

For the past 18+ years, Kathryn has highlighted the humanity in personal finance by shaping stories that identify the opportunities and obstacles in managing a person's finances. All the same, she’ll jump on other equally important topics if needed. Kathryn graduated with a degree in Journalism and lives in Duluth, Minnesota. She joined Kiplinger in 2023 as a contributor.