What Americans Spent The Most Money On In The Third Quarter

Tyler Durden's picture

One quarter after Americans unexpectedly splurged on recreational vehicles (and, more predictably, healthcare) US spending has returned to a more normal pattern in Q3.

As we hinted at the end of August in "Harvey's Destruction May Have Solved The Auto Industry's Inventory Problem", whether due to hurricanes or not, according to the BEA, which admitted it was unable to calculate the overall impact of Hurricanes Harvey and Irma, noting that "it is not possible to estimate the overall impact of Hurricanes Harvey and Irma on 2017 third quarter GDP", the Department of Commerce announced that in the third quarter the biggest driver of marginal spending was Motor Vehicles and Parts, which increased by $15.6 billion to $463.5 billion. Which, considering recent data US and global automakers is somewhat paradoxical considering the ongoing decline in overall sales in the second half of 2017. It was also surprising because as Americans splurged on cars, they pulled back on gasoline purchases, which was the single biggest detractor to spending, subtracting a marginal $3.5 billion in PCE, to $283.6 billion.

In any case, spending on autos was followed by the catch-all category "Other non-Durable Goods" which saw a $10.3 billion increase in spending to $1.067 billion, followed by that traditional staple "Healthcare" which added another $7.6 billion.

Going down the list, we then get Furnishings, Food & Beverages, Other Durable Goods, Financial Services and Insurance, Food Services and Accommodations, Recreation Services and so on. Not surprisingly, after boosting growth earlier in the year, Recreational Goods and Vehicles was modestly lower in the third quarter.

The full breakdown is below.

And now we wait for the revisions to this initial estimate over the coming two months, because something tells us that the auto spending spree will be thoroughly revised well lower.

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rejected's picture

Not the RV shit again.......

GunnerySgtHartman's picture

I'm waiting for the crash and these RVs to be repossessed ... I plan to pick one up on the cheap

Smegley Wanxalot's picture

I'm wondering when sex robots are gonna make that list.

Joe Davola's picture

Those fall under recreational services.

PT's picture

You'll be waiting a long time.  The RVs will be repossessed but then they will be held off market in order to keep prices high.  The banksters will be most annoyed if you acquire that car without the $80k loan.  They'd much rather you couldn't pay it back so they can steal your life, your land and your soul.  The banks don't need repayments.  They have free money.  However, the car companies still need a few full-price paying customers in order to keep the illusion going.  Actually, they just need a steady stream of idiots filling in the over-priced paper work.

Roughly speaking:
"We have X cars worth $Y therefore our inventory is worth $XY dollars so we can borrow $XY-1"

No way will they ever admit that $Y should only be $Y/2 or $Y/10 because then they would have to admit that the company is underwater.  Likewise, the block of land the factory sits on is "worth" $Z so they can borrow $Z-1.  No way will anyone - bank or company - admit that the land is really only affordable at $Z/10.

Gots to have the high valuations so we can get permission to borrow moar munny.  Gots to have Capital Gains becoz there is no money in Income Streams.

You'll only get a cheap RV if you know the right people and what to offer them.  Still trying to figure it out myself.

toady's picture

They still have thousands  (hundreds of thousands?) of Volkswagen diesels that have "faulty" software sitting at the old Pontiac silverdome outside Detroit... I've been working the locals to forge some papers and have a few disappear off the lot... no luck yet...

XBroker1's picture

Houses held off market, cars held off market, RV's held off market.  Anyone see a pattern here?

 

PT's picture

Don't try to buy one:
"For a small fee I will find space to 'store' one of those cars for you, and 'occasionally' 'turn the motor over' to keep the engine parts lubricated and stop the car from deteriorating too quickly ..."

boattrash's picture

...but due to the large scale flooding, those RVs are now called "home" for thousands...not really a splurge, or luxury item.

TGDavis's picture

If that's right, then disregard the remainder of this comment, but doesn't RV sales like this signal a top in the market?

boattrash's picture

Yep, as well as signaling that people are too broke/credit strapped to fix their homes. IMHO

Solosides's picture

You see them in parking lots and roadsides all over western WA. Alongside with all the tent cities here in King county. I think ten of thousands of people all suddenly became camping enthusiasts in the last year.

ElTerco's picture

New Prince song, "Gonna party like it's 1929."

LawsofPhysics's picture

Baby mommas got to keep that Escalade running!

"Full Faith and Credit"

Chupacabra-322's picture

@ Law,

Dude, I saw a GMC Eqinox I believe or the equivalent to the Escashit pulling out of a parking space at Publix. Thing was Fuck’n massive.

And, continue to get bigger & bigger.

Moe Hamhead's picture

and the pickups continue to get louder and louder

Silver Savior's picture

Yep spending on liabilities. How much did they spend on assets that appreciate in value? The RV thing makes sense though because those are now their homes. 

Moe Hamhead's picture

How do they decide if a vehicle is a motor vehicle or a "recreational" vehicle?

Silver Savior's picture

I guess it's an RV if it's made out of flimsy aluminum or cheap fiberglass. 

Karl Marxist's picture

Video headline says "fake rabbi" but every single thing he answered is 100% verifiable and in light of continuing revelations about CIA, Kennedy, media, leftists, child sex molestation, child sex trafficking -- a video joke that is not a joke.

Drater's picture

Hookers and blow are "other non-durable goods"?

toady's picture

Right after Harvey they were running segments on the local news on "how to spot a "Harvey" car".

Apparently everyone in Houston gets a new car, and people in Phoenix get de-funked clunkers.

Rainman's picture

ObamaScare is the 3rd largest growth in spending ? ... how is this a good thing ?

toady's picture

It's been like that since obamacare started....and "healthcare" is right around 20% of GDP.

This shit, and obamacare rates doubling  (or more)  every year, eats at my soul. It doesn't seem to bother anyone else, but I just keep envisioning the country slowly bleeding out....

_SILENCER's picture

Ammo doesn't seem to be on the list.

Rex Andrus's picture

TY needs some LY

Let it Go's picture

No use sending me to an Amazon site because I won't buy from that company!

brushhog's picture

Forgot the big one....TAXES.

Endgame Napoleon's picture

....not for most people in the ever-expanding bottom, with “taxes” meaning a jumbo, $6,269, child-tax-credit cash windfall that equals 4 months of pay.

brushhog's picture

Still have sales tax, gasoline tax, state income tax, property tax ( renters pay this too ), auto tax, inheritance tax ( death tax ), etc,etc,etc Income tax is only one of many taxes we pay.

aztrader's picture

Give a subprime borrower $12,000 off their new car with an 7 year loan and watch sales fly................

PT's picture

That's the trouble with relying on Capital Gains instead of Income Streams.  You keep needing more and more stupid bastards to keep on borrowing.

Byrond's picture

Cars are loans. Big loans. Cars lose msssive value constantly. Negative GDP.

Endgame Napoleon's picture

Clunkers For Cash-on-Hand.

Debt, thy name is a fancy car, offering proof to parking-lot strangers [only] that you are affluent.

aardvarkk's picture

If that's the measure of affluence, then I am one poor fucker.  Bought the current car about 5 years ago with cash for a little over 2 grand, and no plans to buy another until this one goes tits up (hopefully at least10 years from now).  No payment, no maintenance so far aside from oil changes and one brake job, all of which I've done myself.  Used the best synthetic oil/filters and good brake pads.  My money is going into retirement and my daughter's college fund, not on wealth-signalling bullshit.

wmbz's picture

I do a good bit of traveling interstates via automobile, and with out doubt the number of RV's on the road has gone way, way up over the last 5 years. 5th wheelers out the wazoo. 

I guess the baby boomers are the ones shelling out the bucks to see the U.S.A. Sadly most of them are sorry ass drivers!

Singelguy's picture

More likely, they got tired of the upkeep and sky high property taxes, sold their house and bought an RV to live in. All those RV's you see on the road are just people moving their stuff to a cheaper community.

TalkToLind's picture

That's cute.  Now for the real list:

Real Estate Taxes:  XX%
Income Taxes:  XX%
Capital Gains Taxes:  XX%
Vehicle Registration Taxes:  XX%
Sales Taxes:  XX%
Traffic Ticket Taxes:  XX%
U.S. Dollar Deflation:  XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX%

338's picture

AND WE HAVE A WINNER!!!!

 

And the answer is, 'Theft'

 

"I'll have to say, "What are Taxes, Alex?'

Number one expense of every person that works in this feedlot we call the USSA.

 

Taxes

Dig Deeper1's picture

"as Americans splurged on cars, they pulled back on gasoline purchases, which was the single biggest detractor to spending"

Your follow-up needs to be "sending shares of TSLA higher at the open."