U.S. Pet Services Spending (Non-Vet) $6.82B (↑$0.96B): 2016 Mid-Year Update
The US BLS just released their Mid-Year Update of the Consumer Expenditure Survey covering the period 7/1/2015 to 6/30/2016. The report shows Non-Vet Pet Services Spending at $6.82B, Up $0.96B (+16.4%) from a year ago. The following charts and observations were prepared from calculations based upon data from that report and earlier ones. The first chart will help put the $6.82B into perspective with recent history.
- 2013 > 2015: ↑$0.98B (+18.6%)
- Mid-Yr2014> Mid-Yr2016: ↑$1.5B (+28.2%)
- 2015 ($6.26B) vs 2014 ($5.67B)
- ↑$0.59B (+10.4%)
- 1st Half ↑$0.19B
- 2nd Half ↑$0.4B
- ↑$0.59B (+10.4%)
- Mid-Yr 16 ($6.82B) vs Mid-Yr 15 ($5.86B)
- ↑$0.96B (+16.4%)
- Jul>Dec 2015 ↑$0.4B
- Jan>Jun 2016 ↑$0.56B
- ↑$0.96B (+16.4%)
- Pet Services has shown uninterrupted growth since 2013.
- The growth has accelerated since the second half of 2015.
- Although inflation has slowed from the beginning of 2015 through Mid-year 2016, it has still averaged over 2% per year. Thus far, the rising prices have not had an impact on overall Pet Services Spending.
Let’s take a look at the Mid-Year Services Spending by Age Group.
Age Group Observations
- The bulk of Pet Services Spending (70%) is done by the 45 and over group (61% of all CU’s)
- All but 2 Age Groups are spending more on Pet Services
- The 35>44 Age group is down slightly. This is the group of Gen Xers who are under strong financial pressure as they are at the peak of Family responsibilities.
- The over 75 group is more likely to “need” pet services than have them as a convenience. In this case, it is possible that the rising prices could be impacting this lower income group.
Now let’s look at Pet Spending by Income Group
Income Group Observations
It’s an interesting pattern. The Below Avg income group and the wealthiest group over $150K are driving the increase.
- Under $70K ↑$0.32B and $70K > $150K ↓$0.32 exactly cancel each other out.
- CU’s making over $150K, with a $259K avg income, are in effect, generating the entire $0.96B increase.
- The above average income group, primarily those who are Gen Xers, are at the peak of family pressure and are thinking twice about the largely discretionary spending on Services.
The $0.96B growth in Services Spending in the 12 month period ending 6/30/16 was the biggest growth in any 12 month period since they began the annual survey in 1984. It beats out the $0.82B increase in 2012 which came after a 2 year spending decline in 2010-11 due to cautious spending as a result of the financial crisis. Also, the inflation rate for Mid-Yr 2016 was 2.5%, which sounds like a lot. However, the annual inflation rate from 2000 to 2009 in this industry segment averaged 4.1% so 2.5% is a 40% drop. It also means that 85% of the recent $0.96B growth was real.
Of the $0.96B increase, $0.4B came in July-Dec 2015 and $0.56B came in the first half of 2016. So what’s in store for the second half of 2016? Inflation continued to slow, finishing up at 2.03% for the year. Except for the 2010 recession aftermath year, that’s the lowest rate since 1999. 2016 seems to be poised to be an exceptional year for services.
The good news also is widespread. Here are some of the biggest Demographic Segment gainers In Services Spending:
- All Wage & Salary Earners ↑$0.66B
- White, Not Hispanic ↑$0.96B;
- College Grads ↑$1.09B
- Homeowners & Renters are all Up. HomeOwners w/o Mtge ↑$0.51B
- Suburbs ↑$0.77B…only Rural areas are down.
- All Married and Unmarried CU’s are Up. Married Couples “only” (No children) lead the way ↑$0.56B
- All Sizes of CU’s (1 > 5+) are up. 3 person or Less CU’s ↑$0.85