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About 73
million U.S. households now have discretionary income, up from about 57
million in 2002, according to a report by The Conference Board. The
percent of the U.S. population with discretionary income has increased
to nearly 64 percent, up from 52 percent in 2002.
Total
discretionary income in the U.S. topped $1.7 trillion in 2006, with the
household average at $24,335. Per capita income stood at $9,148.
Nearly 78
percent of all discretionary income is held by households earning more
than $100,000. Average discretionary income for this segment, $66,451,
is 2.7 times the national average.
Households
with discretionary income, as defined by the study, are those whose
spendable income exceeds that held by households with similar
demographic features.
"While the
percentage of households with discretionary income has risen over the
past several years, purchasing power remains concentrated in the wallets
of the affluent," says Lynn Franco, Director of The Conference Board
Consumer Research Center. "More than three out of every four
discretionary dollars flows to householders earning $100,000 or more.
And their average discretionary income is more than 2.5 times above
average. "
Top
Regions
The region
with the wealthiest concentration of households is New England
(including Connecticut, Massachusetts, Maine, New Hampshire, Rhode
Island and Vermont). About 63 percent of households have discretionary
income, with an average amount of $27,337.
Household
discretionary income is lowest in the West North Central region
(including Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and
South Dakota). Average household discretionary income in this region is
$20,749.
Top
States
California,
the most populous state, is also the state with the largest number of
households with discretionary income — 8 million. These households hold
$224.7 billion in total discretionary income.
Texas has the
second highest number of households with discretionary income — more
than 5 million, with $136.8 billion in total discretionary income. Other
top states include Florida, with almost 4.7 million households holding
$126.1 billion, and New York, with about 4.6 million households holding
$119.4 billion in discretionary income.
Other
findings:
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The top end of the
affluent group (households with earnings of $200,000 and over)
accounts for only 3 percent of total households and 5 percent of
households with discretionary income. This group, however, has 38
percent of total discretionary income with an average of $173,613,
more than seven times the national average.
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Households with earnings
of less than $50,000 represent nearly 60 percent of all households
and 29 percent of households with discretionary income. However,
they account for only 3 percent of aggregate discretionary income.
Average discretionary income among this market is about $1,900.
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In terms of generations,
baby boomers (born between 1946-1964) represent the largest group,
with 43.7 million households. More than two-thirds have
discretionary income. This segment has the highest average
discretionary income, at $29,754. Generation X (born between
1965-1981) is the second largest group, with 34 million households.
Slightly less than two-thirds have discretionary income. This
segment has the second highest average discretionary income, at
$22,562.
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Householders in
management, business and financial occupations tend to have the most
discretionary income. Almost 87 percent of households in this group
have discretionary income. The average amount is $41,922.
For a
copy of the report contact Carol Courter: Phone:(212) 339-0232
Email:
courter@conference-board.org
Source: A Marketer's Guide to
Discretionary Income
The Conference Board Consumer Research Center
Read this report
For
further information contact:
Lynn Franco
(1) 212 339 0344
lynn.franco@conference-board.org
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