Spending rises as economy improves in South Florida

Dec
11
2014

By Donna Gehrke-White, Sun Sentinel

People seem to be loosening the grip on their wallets.

 

With the economy improving, household spending in South Florida has risen 6 percent in two years, the U.S. Bureau of Labor Statistics says. People are spending more of their money on housing, clothes, groceries and personal care such as haircuts, the BLS said.

 

Overall, households spent on average $40,604 annually in 2012 and 2013, $2,250 more than the previous two-year period.

 

The increase was greater than the nationwide average (5 percent) as well as the rate of inflation, indicating that South Florida's economy is improving faster than the nation's, said economist William B. Stronge, professor emeritus at Florida Atlantic University.

 

South Floridians are "restocking, buying what they may have let slide," Stronge said.

 

In the 2010-2011 period, South Florida households slashed spending by nearly $10,000 from the previous two-year period, cutting back on everything from dining out to buying clothes, as the region tried to recuperate from the recession.

 

"Now things are looking up," Stronge said.

 

In some ways, anyway.

 

People here still spend 21 percent less than the national average, despite paying some of the highest housing rates in the country, the BLS said in its latest consumer expenditure report, released Thursday.

 

The report does not include Palm Beach County, a more affluent county than Broward and Miami-Dade but one that has similar spending patterns, Stronge said.

 

Housing costs in South Florida average $16,212 annually, accounting for nearly 40 percent of an average household's total expenses — significantly higher than the national average of 33.2 percent, the BLS said.

 

In fact, South Florida households spent the highest percentage of their income on housing of the 18 metro areas the agency surveyed, including typically high-cost New York, San Francisco, Boston and Los Angeles.

 

One reason is that people here make less money. Average household income in Broward and Miami-Dade was nearly $8,600 less than the U.S. average of $64,686, the BLS reported.

 

That leaves people like Cyprian Alcindor struggling.

 

Alcindor, who works as a server at a restaurant, said he's looking for a second job that will help pay bills. About half of his pay goes toward paying rent for his Pompano Beach home. "Hopefully, things will get better," he said.

 

In Delray Beach, Greg Goodman said he's careful about all of his purchase. He waits, for example, for sales to buy clothes.

 

"I have to be careful with my money — everything is expensive," said Goodman, a communications manager who says he has a "decent income" but faces rising bills for rent, car insurance and even cable.

 

Many South Floridians also are reining in big-ticket buys, the BLS data indicate. South Florida's net outlay of vehicle purchases was only about a third of the national average in 2012-2013 — $1,089 vs. $3,241. And the average South Florida household spent only $732 a year for home furnishings and equipment, less than half of the U.S. average: $1,571.

 

Many people have even cut back on entertainment, spending an average of $53 less a year in 2012-2013 compared with the previous two years. Their yearly $1,352 budget for going to movies, concerts and other entertainment was almost half of the national average, $2,553, the BLS found.

 

Pembroke Pines firefighter Kristoffer Ruiz said he basically spends his money only on food and other essentials, while he and his wife save to buy a house. They're already burdened with monthly rent of $1,757 a month for a townhome, he said.

 

"It would be cheaper to buy a home," he said.

 

Debbie Klein, owner of a fashion boutique in Boca Raton, believes another reason South Floridians don't spend as much as other Americans is that they're trying to pay off debt accumulated during the recession.

 

"So many people were out of work and bills started to pile up," said Klein, who runs the consignment shop Review. "Now that businesses are starting to hire, people are using the money they are making to pay off bills they couldn't afford when they got laid off."

 

Staff writer Miriam Valverde contributed to this report.