The chart above displays the share of Personal Consumption Expenditures represented by 3 categories of manufactured consumer goods that are most important to U.S. households:
a) food and beverages consumed at home
b) clothing and footwear
c) furnishings and durable household equipment
In the late 1940s, it required almost half (41%) of consumer expenditures to provide for the household basics: food, clothing and home furnishings, which are all manufactured goods.
For every $100 of consumer spending today, only $13.50 is spent on food, clothing and household furnishings and $87.50 is spent on everything else. Contrast that to 1948, when it took $40 of every $100 of spending for the basics, leaving only $60 to spend on all other goods and services.
Bottom Line:
Without the major productivity gains in the manufacturing sector over the last 50 years, it would still require almost half of consumer spending just to furnish our houses, and feed and clothe our families.
The standard of living for the average American household has improved significantly over the last 50 years, and keeps getting better all the time, thanks in large part to greater manufacturing productivity.
Chart and Commentary Courtesy of
CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
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