Households spent more, but curbed some large purchases

U.S. households increased their monthly spending by 4.9% in December compared to one year earlier, according to Federal Reserve Bank of New York data released Tuesday. That’s up from 4.1% in August and 4.6% at the end of 2024.

But a closer look at what Americans are spending money on shows that they’re cutting back in certain key categories.

The bank found that more households had spent on home appliances and electronics in December. The share of households that spent money on home appliances rose from 12.2% in April to 13.8% last month. For electronics, the increase was from 15.4% of households to 20.3%.

The data comes from the bank’s household spending survey, conducted every four months.

On the other hand, a comparison of the August and December numbers finds fewer households made large purchases related to furniture, home repairs, vehicles or vacations. Spending on furniture was essentially flat, while the percentage of households putting money into vacations dropped from over 30% in August to about 26% in December.

Households expect to spend less over the next 12 months on transportation and recreation, but somewhat more on food, clothing, housing and medical care, the bank said.

Residential construction spending rose 1.3% in October

After a several-month delay due to the federal government shutdown, the U.S. Census Bureau released data Wednesday showing construction spending rose 0.5% in October 2025 from the prior month. Spending was down 1% from a year earlier.

The bureau estimated spending during the month at a seasonally adjusted annual rate of $2,175 billion. Three-quarters of that was in private construction. Residential building rose 1.3% over the one-month period and fell 1.2% from one year earlier.

Non-residential activity barely changed in October compared to the previous month, according to a statement by industry trade group Associated Builders and Contractors. More notable was a 0.9% drop since October 2024. The group attributed this to a decline in manufacturing activity.

“With CHIPS Act-enabled megaprojects winding down and the stiff headwind of trade policy, manufacturing construction spending has fallen by nearly 10% over the past 12 months, accounting for more than the entire decline in private nonresidential spending,” ABC chief economist Anirban Basu said in the statement.

Overall, building contractors are upbeat about spending prospects in the first half of this year, Basu said.