Trends in consumer spending, 1959-2000

RISING consumer demand for goods and services has been a key element of U.S. economic growth over the past 40 years. Consumer spending, which is measured in the national income and product accounts as personal consumption expenditures (PCE), accounts for about twothirds of total domestic demand, as

The major trends and developments in consumer spending over 1959-2000 include the following:

* Real consumer spending grew 3.6 percent, slightly faster than total domestic demand.2 The consumer-spending share of domestic demand in current dollars increased from 62 percent to 65 percent.

* Services' share of consumer spending increased from 40 percent in 1959 to 58 percent in 2000, primarily reflecting increases in the shares of medical care services, financial services, recreation services, and education and research services.3

* The increased share of medical care services partly reflected an increase in third-party payments for these services-payments by healthinsurance programs and public programs such as Medicare and Medicaid-and partly reflected the aging of the U.S. population.