Average annual expenditures per consumer unit fell 2.8% in 2009 following an increase of 1.7% in 2008, according to results from the Consumer Expenditure Survey (CE) released by the U.S. Bureau of Labor Statistics.
The spending decrease was larger than the 0.4% decrease in prices from 2008 to 2009 as measured by the average annual change in the Consumer Price Index.
This was the first time there has been a drop in spending from the previous year since the CE began publishing integrated data in 1984.
Spending on housing and transportation fell 1.3% and 11%, respectively, contributing to the overall drop in spending in 2009. Healthcare expenditures rose 5%, the only increase among the major components of spending.
Among the other major components, food dropped 1.1%, apparel fell 4.2%, entertainment dropped 5%, and personal insurance and pensions fell 2.4%.
Mortgage interest payments and charges, a subcomponent of housing, fell from $3,890 in 2007 to $3,594 in 2009, evidence of the higher than normal default rate on mortgages, falling house prices, lower rates of homeownership, and declining mortgage interest rates over the period.
A U.S. District judge Monday dismissed three lawsuits--including one by the National Credit Union Administration--brought against U.S. Bank National Association and Bank of America, National Association regarding their duties as trustees of residential mortgage-backed securities.