Americans Might Have to Spend Like Europeans

The data back up the notion that the buying and selling of consumer goods drives the US economy. Two-thirds of the gross domestic product consists of household consumption. Especially when the economic going gets tough, Americans are urged to go shopping. But the system has hit a snag, with prices shooting up and and the supply chain dealing with a major kink. At this rate, Allison Schrager writes for Bloomberg, American consumers might not recognize themselves. They might have to start shopping like Europeans.

The nation wasn't born buying stuff at this clip. Schrager gives examples of the way consumption is increasing, including:

• Spending per capita. It rose roughly 65% between 1990 and 2015 in the US, while growing 35% in Europe. In Germany, household consumption makes up only about half of the GDP.
• TV ownership. In 1980, 15% of US households had no television, a figure that's fallen now to 3%. By 2015, 40% of households had three or more TVs.
• Home size. American homes averaged 1,700 square feet in 1980, and 2,000 square feet in 2015. This is despite the fact that the average number of household members fell in that period.
• Wardrobes. Five times as many clothes are bought now than were in 1980. A garment is worn an average of seven times before Americans dispose of it.

Europe's more moderate consumption goes along with slower growth. But an economy built on consumption isn't sustainable anyway, Schrager says. "Long-term, sustainable growth doesn't come from going deep into debt to buy stuff we don't really need," she writes. "It comes from technology and innovation, where we come up with new products and better ways of doing things." There would be other benefits—helping the fight against climate change, for instance. US shoppers often buy cheaper goods instead of high-quality products that will last longer. Maybe Americans will become more thoughtful consumers, Schrager suggests, buying less but better stuff. Maybe they'll shop smarter. You can read the full piece here. (More consumer spending stories.)