Thursday, October 14, 2010

Will Communications or Entertainment Spending Take a Dip?

There generally is a very-stable relationship between household income and household spending on communications and entertainment.

Over quite long periods of time, the percentage of household income spent on communications or entertainment is unusually stable as a percentage of total household disposable income.

What could be important, for that reason, is any change in the amount of household income. One wouldn't be surprised to see an unexpected bit of a dip in the percentages as the "recovery" continues to struggle along.

If household income falls, people will wind up paying a higher percentage of total disposable income, or will have to adjust communications or entertainment spending downward.

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