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California leads states in consumer spending

Personal consumption expenditures grow faster in California compared to U.S., government data shows

Consumers in California are among the heaviest spenders in the country for housing and utilities but spend less than the national average for healthcare, energy, and food and beverages, according to new government data.

So-called personal consumption expenditures to cover rent, mortgages, electricity and similar bills ran the average Californian $8,650 in 2012, according to the U.S. Bureau of Economic Analysis. That’s the sixth highest figure in a range stretching from $11,985 in Washington, D.C. to $4,294 in Mississippi.

But in other spending segments, California – often said to be a state with an extreme cost of living – fell below the national standard. At last count, residents spent $5,485 a year on healthcare, compared to a peak of $10,491 in D.C. and a bottom of $4,253 in Nevada.

Per capita spending on gasoline and energy was highest in North Dakota, at $3,916. California, where consumers spent just $1,039 in the category, was the fourth lowest ahead of Florida, New York and Hawaii.

The data mark the first time the government agency has broken out personal consumption expenditures, or PCE, by state.

PCE is a key gauge of consumer spending on goods and services and demonstrates how much income is being spent rather than saved for future use. The measure accounts for roughly two-thirds of domestic spending and is considered the main driver of economic growth down the line.

California, the nation’s most populous state, led the pack with $1.4 trillion in PCE in 2012, out of a U.S. total of $11.1 trillion. Consumers in Wyoming spent the least, shelling out $21.3 billion.

Nationwide, total PCE rose 4.1%  in 2012 from 2011. California outpaced that rate with a 4.7% increase, but came nowhere close to the high set by North Dakota’s 11.5% surge. In the 15 years since 1997, PCE rose 4.8% in current dollars across the U.S. while increasing 5% in California.

Per capita PCE in California is, at $37,134, slightly higher than the national average of $35,498, coming in 18th between Colorado and Montana. Californians spent $22,289 less on goods and services in 2012 than District of Columbia residents, who had the largest expenses.

Spending in California on a per-person basis is rising faster than it is nationwide, swelling 3.7% in 2012 compared to a 3.3% bump across the U.S.

Follow Tiffany Hsu on Twitter at @tiffhsulatimes

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