Scoring Boxes
Consumption Does Not Equal Production BY DICK STORAT
4
BOXSCORE November/December 2021
Consumption vs. Production of Food Adjusted for Inflation, Index: 2017=100 120 110 100 90 80
Average Annual Growth Rates 2020/2010 2020/2019 %/Yr % Consumption 3.8% 4.6% Production 0.1% –6.4%
70
Consumption
Source: BEA
20 20
19 20
18 20
17 20
16 20
15 20
14 20
13 20
12 20
11 20
10 20
20
09
60
Production
Consumption vs. Production of Nondurable Food Adjusted for Inflation, Index: 2017=100 120 110 100 90 80
Average Annual Growth Rates 2020/2010 2020/2019 %/Yr % Consumption 2.4% 3.1% Production –0.6% –4.3%
70
Source: BEA
Consumption
Production
20 20
19 20
18 20
17 20
16 20
15 20
14 20
13 20
12 20
11 20
10 20
09
60
20
C
onsumer spending has been in the headlines of economic news since the COVID-19 pandemic caused widespread shutdown and social distancing in February 2020. Keeping consumer spending going while incomes were reduced has been the key strategy to help the economy get through the pandemic. Government stimulus measures, in the form of direct payments to consumers and expanded and extended unemployment benefits, were the major tools used to keep U.S. consumers spending while the pandemic threatened to stall economic growth. The top chart at right shows how consumption of all types of goods has grown since 2009. Inflationadjusted consumer spending has been converted to an index that was assigned a value of 100 in 2017. Production growth has also been indexed. Production of goods accounts for only about 30% of the nation’s output. The service sector makes up the rest. However, almost all boxes are consumed by producers of goods, and to some extent by wholesalers and increasingly by retailers. Online sale of goods is now the largest retail distribution channel for goods. As the top chart at right shows, goods consumption has grown steadily since 2009. On average over the past 10 years, consumption of goods grew at 3.8% per year. Last year’s data is particularly interesting. During the pandemic, consumer spending grew even faster than the 10-year average. It rose by 4.6% amid the worst months of the pandemic, evidence that the government stimulus was doing the job.
