What Americans Spent The Most Money On In The Third Quarter

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.


PT GunnerySgtHartman Fri, 10/27/2017 - 11:35 Permalink

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.

In reply to by GunnerySgtHartman

toady PT Fri, 10/27/2017 - 12:11 Permalink

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...

In reply to by PT

Silver Savior Fri, 10/27/2017 - 10:04 Permalink

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. 

toady Fri, 10/27/2017 - 10:10 Permalink

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.

aardvarkk Endgame Napoleon Fri, 10/27/2017 - 12:28 Permalink

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.

In reply to by Endgame Napoleon

wmbz Fri, 10/27/2017 - 11:19 Permalink

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!

TalkToLind Fri, 10/27/2017 - 11:54 Permalink

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%

Dig Deeper1 Fri, 10/27/2017 - 13:30 Permalink

"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."