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Personal Consumption Expenditures – 2021

State-level data for Personal Consumption Expenditures (PCE), the most comprehensive measure of consumer spending, came out this week.  The data are only available at an annual frequency, with the new data covering the year 2021.  Arkansas growth was 12.8%, slightly outpacing the national average growth rate of 12.7%.  Last year, we noted that Arkansas was one of only a handful of states that saw an increase in PCE in 2020 (albeit only 0.1%). The new data revise that figure upward to 0.6%.

Source: Bureau of Economic Analysis

The breakdown of expenditures by category shows that Durable Goods purchases led the growth surge, increasing by approximately 25% for Arkansas and the U.S.  Nondurable goods purchases increased by 16.8% in Arkansas and 13.7% nationwide. After declining in 2020, spending on services rebounded in 2021, growing 9.0% in Arkansas and 10.2% for the U.S.

Source: Bureau of Economic Analysis

With the growth rates of goods purchases exceeding that of services, the share of services as a percent of total spending declined for a second year in 2021. The long-run trends in services shares have been increasing for decades.  With two years of decline, however, the services share has dropped from 69% in 2019 to 65.4% for the U.S., and from 66.1% to 62.3% here in Arkansas.

Source: Bureau of Economic Analysis