American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
February 2011

Score One for the Great Recession

3. Cool Links:  2010 LABOR FORCE, 2009 SCHOOL ENROLLMENT

To see Cheryl Russell’s Demo Memo blog, click here.

1. Hot Trends 

Score One for the Great Recession



How do you measure bad times? Specifically, how does the Great Recession compare with the Great Depression? Economists typically use GDP as the measuring stick. During the Great Depression, GDP fell by a stunning 27 percent. During the Great Recession, GDP fell only 4 percent. Using the GDP measure, then, the Great Recession was only 15 percent as severe as the Great Depression (4/27 x 100 = 15).


Something is missing from the GDP comparison, however: a human face. GDP and other macro-level economic statistics fail to capture the human experience of hard times. We need something that measures the personal dimension of economic downturns. One way to measure the personal is with the yardstick of demographic change. We can use demographic statistics–unemployment, homeownership, living arrangements, births, marriages, migration, and even death–to compare the Great Recession with the Great Depression. And we will keep score.



When comparing the Great Recession with the Great Depression, the unemployment rate is the Holy Grail. Unfortunately, it is not possible to directly compare the unemployment rates of the two time periods. Today, the federal government surveys an enormous sample of the population every month to determine unemployment. Not so during the Great Depression. Historians have made educated guesses about unemployment during the 1930s by subtracting estimates of the employed from estimates of the civilian labor force. The remainder is the unemployed. According to these calculations, unemployment during the Great Depression peaked at 25.2 percent in 1933.


The official unemployment rate during the Great Recession peaked at a much lower 10.1 percent in October 2009. Some say this figure does not tell the whole story because it counts as unemployed only those who have been looking for work recently. Even using the most expansive definition of unemployment, however, the rate peaked at 18.0 percent in January 2010 and now stands at 16.1 percent (See U-6 in table A-15 of the Employment Situation report).


We will keep score using this formula: Great Recession statistic/Great Depression statistic times 100. Using the official unemployment figure from the Great Recession, the formula is: (10.1/25.2) x 100 = 40. Using the larger Great Recession unemployment figure, the formula is (18.0/25.2) x 100 = 71. The average of 40 and 71 is 56. Score = 56.



During the Great Depression, the homeownership rate fell from 47.8 percent in 1930 to 43.6 percent in 1940–a 4.2 percentage point decline. So far during the Great Recession, the homeownership rate has fallen from the 69.0 percent peak in 2004 to 66.9 percent in 2010–a 2.1 percentage point decline. Score: (2.1/4.2) x 100 = 50.


Living arrangements

Despite the economic hardships of the Great Depression, household size continued its long-term historical decline, falling from 4.1 to 3.8 persons per household between 1930 and 1940 as people moved from farms to cities. During the Great Recession, average household size crept up slightly (and not at all after rounding), rising from 2.56 in 2007 to 2.59 in 2010. Because of ongoing urbanization during the 1930s, this indicator is not comparable between the two time periods.



During the Great Depression, the number of people legally immigrating to the United States plummeted by 91.8 percent in just a few years, falling from 279,678 in 1929 to just 23,068 in 1933. So far during the Great Recession, the number of people legally immigrating to the United States fell from a decade high of 1,266,129 in 2006 to 1,130,818 in 2009–a 10.7 percent decline. Score: (10.7/91.8) x 100 = 12.



During the Great Depression, the number of births fell from 2,582,000 in 1929 to a low of 2,307,000 in 1933–a 10.7 percent decline. So far during the Great Recession, the number of births has fallen from a peak of 4,316,233 in 2007 to an estimated 4,055,000 in 2010–a 6.4 percent decline. Score: (6.4/10.7) x 100 = 60.



During the Great Depression, the number of marriages fell from 1,233,000 in 1929 to a low of 982,000 in 1932–a 20.4 percent decline. So far during the Great Recession, the number of marriages fell from 2,205,000 in 2007 to 2,077,000 in 2009–a 5.8 percent decline. Score: (5.8/20.4) x 100 = 28.


Life expectancy

During the Great Depression, life expectancy climbed to 63.3 years in 1933, then fell to 58.5 years by 1936–a decline of 4.8 years. So far during the Great Recession, life expectancy has fallen a miniscule 0.1 years–from 77.9 in 2007 to 77.8 in 2008 (the latest data available). Score: (0.1/4.8) x 100 = 2.


The Score

Average the six scores, and the result is 35. In other words, the Great Recession has been about one-third as severe as the Great Depression and more than twice as bad as the GDP comparison suggests.


Of course, the demographic impact of the Great Recession is still unfolding. Homeownership rates, births, marriages, immigration–even life expectancy–could decline further as households adjust to reduced circumstances. Any continuing declines will drive the score higher, but probably not by much. There is reason to believe we are through the worst of the Great Recession. As financial analyst and blogger Barry Ritholtz notes, most of the economy is people getting up in the morning and sending their kids off to school. As long as we are still doing that, we will muddle through.


By Cheryl Russell, editorial director, New Strategist Publications. If you have questions or comments about the above editorial, contact


Percentage of households buying gasoline during an average week: 68.

Source: American Buyers: Demographics of Shopping

2. Q & A

How Do You Define Reading?

The American Time Use survey, which is taken annually by the Bureau of Labor Statistics, asks Americans what they did minute by minute during the previous 24 hours. Their activities are classified into categories such as “reading for personal interest” and “computer use for leisure.” Here’s the question: How does the Time Use Survey classify reading a book on an iPad? Is it computer use or reading?

Not a problem, according to the time use experts at the BLS. Computers, they say, are tools for accomplishing other tasks. When respondents report using a computer, the interviewer then asks what they were doing on the computer. If they were reading a newspaper or book on their iPad, the activity is classified as reading, not computer use. Similarly, if they were using their computer to manage their money, the activity is classified as financial management rather than computer use. In fact, the category “computer use for leisure” is nothing more than a residual–what little remains after assigning all possible computer use to other activities.

This is good news because it means the time use survey category “reading for personal interest” is positioned to capture any changes in time spent reading due to e-readers. An increase in reading might be on the way, according to an analysis posted by Read It Later, an app that allows users to save articles on their computers and phones for later reading. The company’s data show a spike in iPad reading between 8 and 10 pm–typically television time. Could e-reading compete with television as a prime-time activity? Maybe, but it is not happening yet. Between 2005 and 2009, the average person spent a lot more time watching TV and slightly less time reading. There is one exception, however. Teenagers aged 15 to 19 spent a bit more time reading and a bit less time watching TV. Is this a blip or a sign of things to come?

For more about American time use see New Strategist’s American Time Use or visit the ATUS web site.

By Cheryl Russell, editorial director, New Strategist Publications. If you have any questions or comments about the above Q & A, contact


Market share controlled by householders aged 55 or older…

Newspaper and magazine subscriptions: 61%
Newspapers and magazines, single copy: 39%

Source: Household Spending: Who Spends How Much on What, 15th edition

3. Cool Research Links

To keep up-to-date on ever-changing demographics and lifestyles, check out these useful links.

2010 Labor Force Statistics
The Bureau of Labor Statistics recently released annual labor force statistics for 2010, available at this site. The data show a 9.6 percent unemployment rate for the year, declining labor force participation rates among men and women under age 55, and an expansion in the number of workers with part-time jobs.

2009 School Enrollment 
It seems to take forever for the Census Bureau to publish school enrollment data. The latest numbers, for October 2009, were released last week. They show a large spike in college enrollment overall, with nearly 20 million in school (including full- and part-time students, two- and four-year schools, and graduate school).The fastest growth has been in enrollment at two-year public schools. At private four-year schools, full-time undergraduate enrollment peaked in 2005.


Among items on which the average household spends the most, rank of…

Veterinary services: 51
Physician’s services: 54

Source: Best Customers, 7th edition

4. Find out how American Consumers Spend their Money

Consumers are cutting their spending, making it vital to get the answers to Who buys? What do they buy? How much do they spend? And, most importantly, what will they cut as their incomes fall and expenses rise?

  • NEW TITLE American Buyers: Demographics of Shopping is a groundbreaking new guide to buying patterns, essential information in these difficult economic times. Its weekly and quarterly spending data show you how many households buy certain products and services and how much buyers pay for them, all broken down by age, household income, household type, race and Hispanic origin, region of residence, and education.
  • Starting a new business? Repositioning your products? In the new 15th edition of the annually updated Household Spending: Who Spends How Much on What, you get dollar-for-dollar answers to who is buying hundreds of products and services ranging from laundry detergent and phone cards to motorcycles, wine, and restaurant meals.
  • Best Customers: Demographics of Consumer Demand, 7th ed., is a unique guide to how changing demographics are reshaping the consumer marketplace. Find out who spends the most and who controls market share–often surprisingly different–for over 300 products and services.
  • The 14 volumes in the Who’s Buying Series, which can be purchased individually or as a set, give you the big picture about consumer spending by age, income, household type, race, Hispanic origin, region of residence, and education. Each volume focuses on an individual product category, ranging from apparel and beverages to restaurants, consumer electronics, and travel.

For your convenience, New Strategist’s titles are available as searchable single- and multiple-user pdfs that are linked to spreadsheets of all the data tables in each book so you can do your own analyses and create PowerPoint presentations.


Percent of restaurant spending the average household devotes to…

Breakfast: 9
Lunch: 31
Dinner: 43

Source: Who’s Buying at Restaurants, 8th edition