Spending on Recreation Has Been Increasing Since 2011

Over at Wonkblog, Heather Long writes:

Forget the soaring stock market. Here’s the real evidence the U.S. economy is getting better: Food stamp usage is down, and spending on entertainment — everything from Netflix to Disney World trips — is up. The average American household now spends more than $2,900 a year, a record high, on entertainment, according to data released Tuesday by the Labor Department. That’s a good sign the middle class is feeling better about how much money is in their piggy banks.

The chart below is sort of an accident because I initially went to the wrong place for the data, but here is spending since 1984 for “entertainment” as defined by the BLS and for the broader category of “recreation” as defined by the BEA:

Spending on recreation dropped for only two years during the Great Recession. Then it flattened, and it’s been rising steadily for five consecutive years. Spending on entertainment, however, dropped for five years, and has only been rising for the past three years. It has yet to return to its 2008 peak.

I’m not entirely sure what to make of this. One thing, of course, is that if this is your metric for “real evidence” that the economy is getting better, then it’s been getting better for at least three years, and maybe for five. The other is that recreation rebounded sooner and stronger than entertainment. Why is this?

  • Recreation includes recreational vehicles. I’m not sure how that’s defined, but it’s a fair guess that not every recreational vehicle is truly used for recreation all the time.
  • Lots of entertainment these days is cheap (video games) or free (spending time on social media). This makes traditional entertainment like movies and concerts a tougher sell. However, it also means that this metric is not necessarily a good way to judge the economy.
  • Spending on recreation has gone up 120 percent since 1984 while spending on entertainment has gone up only 36 percent. Entertainment is just a slower-growing category.

My best guess: Recreation is a better category to use, and it’s been on the rise since it bottomed out in 2011. There’s not much real news in the latest numbers.