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Oil boom and housing bust alter U.S. spending trends

First Published Aug 07 2014 12:09PM      Last Updated Aug 07 2014 03:55 pm

FILE - In this Friday, Nov. 23, 2012, file photo, a man examines a row of washers and dryers while shopping at a Sears store in Henderson, Nev. Consumer spending has recovered at a much slower pace in states with big housing busts, a stark illustration of how the housing downturn has weighed on the economy years after the recession. Spending in Nevada rose just 3.5 percent in the first three years after the recession ended, the weakest of any state and far below the national average of 10.7 percent, according to a new annual government report. (AP Photo/Julie Jacobson, File)

Consumer spending has soared since the Great Recession ended five years ago in U.S. states with oil and gas drilling booms and has lagged in states hit especially hard by the housing bust.

The figures come from a new annual report the government issued Thursday that for the first time reveals consumer spending on a state-by-state basis. The numbers point to substantial shifts in the economy since the recession ended.

Spending jumped 28 percent in North Dakota, the largest gain nationwide, from 2009 through 2012, the latest year for which figures are available. It surged nearly 16 percent in Oklahoma.



Other states with rapid total personal consumption expenditures growth in 2012 were Texas, the District of Columbia and Utah.

By contrast, spending eked out a scant 3.5 percent increase in Nevada, the weakest for any state and far below the 10.7 percent national average. Arizona’s 6.2 percent increase was next-weakest. Home values plummeted in both states once the housing bust hit in 2006.

The changes in spending patterns in North Dakota have been particularly dramatic. Its per-capita spending in 2007, before the recession began, was $32,780. That ranked it 24th among states. By 2012, the figure was $44,029, fourth-highest nationwide. (The figures aren’t adjusted for inflation.)

North Dakota has boomed in large part because of a breakthrough drilling technique, known as hydraulic fracturing, or "fracking," that has unlocked vast oil and gas reserves. The state’s per-person income soared 16.2 percent, before inflation, from 2011 to 2012, by far the most for any state.

The report points to wide spending disparities elsewhere in the country. Per-person spending in 2012 was highest in Washington, D.C., at $59,423, followed by Massachusetts at $47,308. Spending was lowest that year in Mississippi, at $27,406. Arkansas was the second-lowest, at $28,366.

The size of the disparities has changed little in the past decade.

The government’s report includes figures for specific spending categories. For example, consumers spent the most on housing and utilities in Washington, D.C., where per-capita spending reached $11,985, followed by Hawaii at $10,002.

Utah ranked among the lowest for health care and food and beverage spending categories.

 

 

 

 

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