Assignment:
Description: Consumption is the largest driver of the U.S. economy. Households need to manage their budgets in order to cover the key expenditures of housing, food, transportation, and health care, in addition to saving some money. This activity looks at average household spending by major component.
Step 1: Acquire data from an original source-The U.S. Bureau of Labor Statistics:
https://www.bls.gov/news.release/cesan.nr0.htm. Scroll down to Table A, which shows the average household income and expenditures by component.
Step 2: Using the latest year for which data are available, input the average expenditures for each category (the first row of data contains the total expenditures for all categories). Then, in the right column, calculate the percent of total spending (round to the nearest tenth of 1%) that each category represents.
Category Average Spending (in $) Percent of Total Spending
Average annual
expenditures (total) 100.0%
Food
Housing
Apparel and services
Transportation
Health care
Entertainment
Cash contributions
Insurance and pensions
All other expenditures
Step 3: Using Excel, enter each category and the percent of total spending from Step 2 in two columns, including the header row. Do not include the total expenditures row or the average spending in $ (middle column). Then using your mouse, highlight the 20 cells (10 rows including the header row x 2 columns), click the "Insert" tab from the top banner, and finally under "Charts" select "Insert Pie Chart". A pie chart will appear.
Under "Chart Elements"; uncheck "Chart Title" and "Legend", and check "Data Labels".
Within the data labels option, select "Data Callout", which will label each category in the pie chart. Copy and paste this chart into your response sheet.
Lab Questions:
1. What are the three largest categories of household expenditures, and what percent of average total spending do these three categories combined represent?
2. Which category or categories of household expenditures do you believe are the most stable from year to year? Which category or categories do you believe are most likely to fluctuate from year to year? Explain your answer.
3. What are some important economic factors that determine whether the average expenditures for each category experience large changes over time?