One of the first things you want to understand before starting any business is your target audience—more specifically, their spending capacity.

With nearly $600 billion ecommerce sales in 2019, the United States market definitely shows potential. So how much does the average American spend per year?

According to the latest statistics, the average yearly expenses of a US consumer in 2018 is $61,224. That averages to $5,102 per month. 

This represents a 1.9 percent growth from 2017, during which average consumer spending in the US was $60,060. This is more than two times slower than the 2016 to 2017 growth rate of 4.8 percent.

Despite the relatively slow increase in 2018, the average annual American spending has actually steadily risen over the past few years. 

In 2015, the average yearly expenses of a US consumer was $55,978. That means that in just three years, US consumers increased their average annual expenditure by 9.4 percent, which is an average annual growth rate of three percent.

Interestingly, the rate of increase in average consumer spending in the US is actually much slower than the rate of increase in income. From 2015 to 2018, the average US consumer income rose from $69,627 to $78,635—a 12.9 percent overall increase and an average annual growth rate of 4.2 percent. 

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Average Consumer Spending: Top Three Expenses

US consumers’ biggest expenditure is on housing. In 2018, the typical US consumer spent $20,091 on housing, which covers expenses on both owned and rented dwellings, housing utilities, operations, supplies, as well as all furnishings and equipment. This represents 32.1 percent of their average yearly expenses and a one percent year-over-year increase. 

US consumers’ second-highest expense is food. Of the average yearly expenses in 2018, $7,923, or 12.9 percent, is spent on food. This includes both meals cooked at home and eating out. 

The third-biggest expenditure is personal insurance and pension. The average US consumer spent $7,296 on insurance and pension in 2018, which is 11.9 percent of their annual expenditure and is a 7.8 percent increase from the previous year. 

In total, the top three expenditures of US consumers in 2018, housing, food, and pension and insurance, add up to $35,310—or 57.7 percent of their average yearly expenses.

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