American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
January 2012

The End of the World As We Know It


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

1. Hot Trends 

The End of the World as We Know It

There’s no need to count down the days until December 21, 2012–when some say the Mayan calendar predicts the end of the world as we know it. The Mayans were right, but they were off by about 20 years. The Internet made primitives not only of older generations, but of all time before, say, 1993. That’s when instantaneous mass communication lit up the earth like a light bulb and ended the World as We Knew It. Those of us older than say, 30, have been adjusting to the consequences ever since. The younger ones don’t know what all the fuss is about.


For those in doubt, here is just one example: In the oh-so-hip series of Whole Earth Catalogs (published from 1968 to 1972), each entry was accompanied, quaintly, by the mailing address of the manufacturer. Like something you see in the catalog? Write a letter and mail a check. The end of the world has not been pretty. It has not been easy. And it is not over.


The Rise of the City

Nevada was once the fastest growing state. Now it has fallen to 27th place, according to the Census Bureau’s 2011 state population estimates. Between April 1, 2010 and July 1, 2011, Nevada’s population grew by just 0.8 percent. This is well below the 1.7 percent growth rate of North Dakota, which ranks a much higher 6th among states because of its booming economy.


Interestingly, the fastest growing “state” is the District of Columbia, something that has not occurred since the 1940s according to the bureau. Between April 1, 2010, and July 1, 2011, the District of Columbia’s population expanded by 2.7 percent–well above second place Texas (2.1 percent). Behind the growth of DC is the magnetic pull of the wired (and wireless) urban lifestyle with its social connections and employment opportunities. Other metropolitan centers throughout the nation are, no doubt, similarly growing as isolated and increasingly desolate rural America hollows out.


Creating Jobs: It’s Not Rocket Science

Want to boost employment for young and middle-aged adults? Then encourage boomers to retire earlier rather than later by letting them buy in to Medicare before age 65. A new study by the National Bureau of Economic Research (Does Retiree Health Insurance Encourage Early Retirement? NBER Working Paper 17703) shows that the availability of retiree health insurance leads to earlier retirement–especially among workers aged 62 and 63. Workers who are offered retiree health insurance are 21 percent more likely than those without insurance to retire at age 62, and they are 32 percent more likely to retire at age 63.


Mamas, Don’t Let Your Babies  

Grow Up to be Convenience Store Clerks

Sixty-three percent of all homicides in retail trade occur in food and beverage stores or gasoline stations. Convenience stores account for the single largest share (23 percent), according to the Bureau of Labor Statistics.


Can Internet Search Predict What’s Next?

Apparently, yes. A study posted on the Liberty Street Economics blog (Forecasting with Internet Search Data) finds that “Internet search data can forecast the content of some economic data releases.” Because most Americans (nearly 80 percent) are on the Internet, their search behavior (16 billion Internet searches per month) can be used as a predictor of their behavior, say the researchers. This is a nascent field of study, but the preliminary results bode well for the development of new ways to spot trends. The researchers cite the example of more people searching for information about automobiles, which may precede an increase in car sales.


A number of studies cited in the Liberty Street blog post show that search analysis can accurately predict financial trends. One cited study found that “searches for a firm’s most popular products are better than analyst forecasts at predicting earnings surprises and the subsequent market reaction.” While the blog post focuses primarily on spotting economic trends, Internet search analysis is likely to be an even better predictor of more slowly evolving demographic trends. Home buying, marrying, moving, having children–all are likely to be preceded by billions of Internet searches, and the trends in those searches are likely to become a crystal ball that can tell us what’s next.


Bad News for Colleges

The Census Bureau’s recently released school enrollment statistics show that college enrollment hit an all-time high of 20 million in 2010. Sounds great, no?


Not if you look more closely at the numbers. Enrollment in four-year colleges fell between 2009 and 2010, to 10,450,000–down by 11,000 students. Ok, that’s a very small decline in the overall scheme of things, but there’s more. The number of students enrolled full-time in four-year schools fell by a larger 199,000 to 8,486,000. And that’s not all. The number of full-time students attending private four-year schools continued its downward trajectory, falling to 1,805,000–13 percent below the all-time high of 2,077,000 in 2005. Perhaps more ominous, the number of full-time students at public four-year schools also fell between 2009 and 2010, down by 121,000 to 6,680,000.


Bottom line: the growth in college enrollment is occurring only at two-year colleges and at graduate schools. The traditional college market is shrinking.


Hard Times Change Minds

A few years ago, only 43 percent of non-Hispanic whites saw a conflict between rich and poor in the United States, according to Pew Research Center (Rising Share of Americans See Conflict between Rich and Poor). That was before the ranks of the poor and almost-poor expanded to encompass nearly half the American population–including many non-Hispanic whites who once thought unemployment, loss of health insurance, foreclosure, bankruptcy, and homelessness happened only to other people.


My, how times have changed. As the Great Recession evolved from a temporary setback to a permanent condition, the attitudes of non-Hispanic whites have been transformed. Fully 65 percent now say there is a “strong” or “very strong” conflict between rich and poor in the United States–up 22 percentage points in just two years. Non-Hispanic whites are more likely to see a conflict than Hispanics (61 percent), but still less likely to see one than blacks (74 percent).


Trouble Ahead for Cable?

Cable and satellite television services are the single biggest entertainment expense for American households. And that spells trouble for the industry. In 2010, the average household spent $621 on cable/satellite television service–53 percent more than in 2000, after adjusting for inflation. Average household spending on this category increased 2 percent between 2009 and 2010 alone, despite an 8.5 percent decline in overall spending on entertainment. Cable/satellite services now rank 18th among the categories on which the average household spends the most, up from 33 in 2000.


The cable/satellite industry has gotten too big to get away with this much longer, turning itself into a target for budget-cutting consumers and lower-priced competitors. A recent Harris poll shows a large share of households looking for ways to cut their cable bill. Twenty-one percent have canceled or cut back on cable spending in the past six months, and another 22 percent considered cuts. With alternatives to cable/satellite services now emerging, the industry is headed for a haircut.

The Age of Social Security

The average age at which men claim Social Security is 63.8, according to the Social Security Administration. Forty-four percent of men take Social Security at 62–the earliest possible age. The average age at which women collect Social Security is 63.7, with 49 percent starting at age 62.


Life Expectancy Ticks Up Again

Life expectancy in 2010 continued its climb into record territory, rising to 78.7 years at birth. The government recently began to collect data on life expectancy by race and Hispanic origin, and the 2010 statistics still show Hispanics living the longest. Hispanic life expectancy at birth is 81.3 years versus 78.8 years for non-Hispanic whites.
These are a sampling of posts published in the past few weeks in Cheryl Russell’s Demo Memo blog. Please send questions or comments to Cheryl Russell at


How much money does a household need to make it into the top 20 percent? In 2010, it took an annual income of $100,065 or more.

2. Q & A

Why Are Economists in Charge?      


Good question, and one that a lot of demographers are asking themselves these days. After watching budget surplus turn into deficit, the housing bubble inflate and explode, and the Great Recession unfold and persist, one has to wonder why anyone listens to economists anymore.


This was the last straw: the release of the 2006 transcript of a Federal Reserve Board meeting, where a roomful of clueless economists dismissed the looming housing crisis and chortled over the excesses in the mortgage market, all while fawning over former Fed chairman Alan Greenspan. It was just so high school. Yes, it really makes you wonder why demographers are relegated to the bowels of the Census Bureau while economists are high-fiving it with the rich and powerful.


Here’s the problem: Economists are not very good at assessing the present or predicting the future with any kind of accuracy. Their profession is flawed because it ignores the elephant in the room–us, society, a group of people with complex relationships and common interests. Society is the economy’s engine. Like an auto mechanic mesmerized by the paint job on a car, economists never bother to pop the hood. Demographers, on the other hand, are elbow deep in engine grease. They are experts on society and how it works. Trouble is, most of them are mired in the minutia of academia or trapped in the bureaucratic basements of government, high school nerds all grown up and still ignored.


Demographers could have predicted that budget surplus would turn to deficit as the massive baby-boom generation retired. Demographers could have predicted that the housing bubble would burst because housing prices were out of whack with household incomes. Demographers could have predicted that the housing market–and thus the economy–would be slow to recover as high rates of unemployment, stagnant wages, and the burden of student loans prevented young adults from establishing independent households. But if any demographer poked his head out of his cubicle to make these predictions, no one paid any attention because demographers are not the cool kids. Economists are.


By Cheryl Russell, editorial director, New Strategist Publications. Questions or comments, please contact


The top five entertainment expenses for the average household:
1) cable or satellite television service
2) pet food
3) pet medicines
4) veterinary service
5) and movie/amusement park admissions

3. Cool Research Links

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


School Enrollment

This is the access point for the Census Bureau’s data on school enrollment, which is always slow to be released. The site has recently been updated with 2010 statistics. Although overall college enrollment is at a record high, a closer look at the numbers shows that traditional college students–undergraduates at four-year schools–have begun to decline.



The Condition of Education

Every few years–and this is one of them–the National Center for Education Statistics’ annual publication, The Condition of Education, examines what it dubs “the immediate transition to college” by family income. The statistics show the percentage of recent high school graduates who have enrolled in college by the following October. The latest numbers (for 2009) show that the college enrollment rate has been rising regardless of family income, but a wide gap by income remains. Among recent high school graduates from low-income families, 55 percent were enrolled in college by October. Among their high-income counterparts, the figure was 84 percent.


State Population Estimates
Is the Great Recession changing state population trends? Yes and no. With fewer people moving, some states that were growing rapidly are now languishing, and other states that were barely growing at all are stabilizing. But overall patterns remain pretty much the same. Between 2010 and 2011, the South and West grew at a much faster pace (up 1.3 percent) than the Northeast and Midwest (up less than 1 percent).


Average annual amount spent on day care centers by households that spend on this category: $5,320.

4. Meet Your Customers

Who buys? What do they buy? How much do they spend?

Get the dollar-for-dollar answers you need to succeed in today’s tough economy from these one-stop resources


The annual spending data in Household Spending: Who Spends How Much on What, the first edition of which was published in 1991, allow you to compare and contrast spending by a host of demographic characteristics so you can determine market potential and the dollar size of each market, identify your best customers, and understand which segments account for the largest share of spending. New to the 16th edition are intriguing results of how the nation’s spending habits have changed because of the Great Recession, with comparisons of spending trends between 2000-06 and 2006-09.


American Incomes: Demographics of Who Has Money has the 2010 income data you need to stay competitive in an unpredictable economy. It is a one-stop resource for understanding the economic status of Americans–how the incomes of men and women are changing, which households have money left over after paying for necessities (valuable discretionary income figures calculated just for this book), who is wealthy, and who is poor. New to the 8th edition are detailed estimates that show trends in discretionary income and spending. And the chapter on wealth shows the effects of the Great Recession on household assets and debt.


In the new 8th edition of Best Customers: Demographics of Consumer Demand, experts and novices alike can see at a glance who spends the most and who controls the largest market share–often surprisingly different–on over 300 products and services organized into 21 chapters that focus on entertainment, groceries, transportation etc.–everything a consumer might buy. Based on unpublished data–you can’t find this on the Internet–from the Bureau of Labor Statistics’ invaluable Consumer Expenditure Survey, Best Customers brings you insight into household spending by householder age, income, household type, race and Hispanic origin of householder, region of residence, and educational attainment.


The 14 volumes in the new Who’s Buying Series, which can be purchased individually or as a set, gives you the big picture about consumer spending by age, income, household type, race and Hispanic origin of householder, region of residence, and education. Each volume focuses on an individual product category, ranging from apparel and beverages to restaurants, consumer electronics, and travel. To round out the spending picture, you also get who-are-the-best-customers analyses of the data. New to these editions are valuable detailed comparisons of spending before (2000-06) and after (2006-09) the Great Recession.
For your convenience, all of New Strategist’s titles are available as searchable single- and multiple-user pdfs linked to spreadsheets of each data table so you can do your own analyses and create PowerPoint presentations.


The single most popular dining occasion is lunch at a fast-food restaurant, with 40 percent of households buying fast-food lunches during an average week.

Source: Who’s Buying by Age