Income and Spending Patterns Among Black Households

Household spending data can offer great insight on how households choose and prioritize their wants and needs. In addition, changes in the household spending market basket help to determine Social Security’s general benefit increases, based on cost of living, as measured by the Consumer Price Index. Moreover, such information is widely used by policymakers and researchers to study the impact of inflation and government economic policy. Data from the U.S. Bureau of Labor Statistics (BLS) Consumer Expenditure (CE) Survey provide information on annual household spending. From these aggregated data, analysts, in government, business, labor, and academia, can generalize about consumer behavior in the U.S. population. However, looking at demographic subgroups of the population can give us a deeper understanding of consumption preferences and spending behavior for a particular group. Using data from the CE Survey, this article looks at the household spending and the income distribution of all Black households. It then compares and contrasts the spending patterns of low-income Black households to their high-income counterparts. Findings show that the average amount of pretax income for Black households is about 70 percent of the national average. In addition, the analysis based on income shows that tobacco and smoking supplies were the only expenditure category in which high-income Black households did not outspend low-income Black households