A new study says more than 11 percent of consumer spending is now dedicated to nonessential goods.
What recession? Despite the fact that most Americans are still struggling in the worst economy since the Great Depression, a "non-scientific study" from the Wall Street Journal says that U.S. citizens now spend $1.2 trillion annually on nonessential goods. For context, that's more than 11 percent of overall consumer spending.
A decade ago, nonessential goods amounted for only about 9 percent of consumer spending, and in 1959, that number was 4 percent, adjusted for inflation. By contrast, this year, nonessential goods purchases are up 3.3 percent from where they were last year, while spending on stuff that really matters—food, shelter, medicine, etc.—is up only 2.4 percent.
The Journal's takeaway from its findings is uncertain. One the one hand, the paper suggests that "a triumph of capitalism" has succeeded in raising living standards. But on the other, the massive amount of useless junk people buy "could be read as a sign that U.S. economic growth relies too heavily on stimulating demand for stuff people don’t really need, to the detriment of public goods such as health and education." Either way, it's worth considering that only 50 years ago, our parents and grandparents—otherwise known as "the Greatest Generation"—were living happy, enriching lives with far less stuff than we have now.
You might want to take this study and post it on your calendar where it says "Holiday Season."