States With the Most Big Spenders

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5. New York
> 2012 spending per capita: $42,043
> Personal income per capita: $53,241 (6th highest)
> Pct. bachelor’s degree: 33.4% (9th highest)
> June unemployment rate: 6.5% (tied-16th highest)

Nearly 476,000 New York households earned at least $200,000 in 2012, second only to California. These wealthy residents made up 6.6% of all households, also more than the vast majority of other states. New York residents spent the fifth most per capita of any state and, in 2012, total personal consumption expenditure topped $820 billion, more than all but two other states. Durable goods accounted for less than 10% of spending, among the smallest shares of statewide consumption expenditures in 2012. Services, on the other hand, made up more than 65% of spending, among the higher proportions.

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4. New Jersey
> 2012 spending per capita: $42,654
> Personal income per capita: $54,987 (3rd highest)
> Pct. bachelor’s degree: 36.2% (5th highest)
> June unemployment rate: 6.4% (tied-19th highest)

Like the majority of high spending states, New Jersey residents’ spending habits tended towards services, rather than durable and nondurable good spending. More than two-thirds of all spending in New Jersey went to services, such as housing, health care, and recreation in 2012, a higher share than in all but two other states. Unsurprisingly, New Jersey residents are quite wealthy. More than 8.5% of households earned more than $200,000 in 2012, more than in any other state. A typical household earned nearly $70,000, the second-highest median income in the country.

3. North Dakota
> 2012 spending per capita: $44,029
> Personal income per capita: $54,871 (4th highest)
> Pct. bachelor’s degree: 27.9% (25th highest)
> June unemployment rate: 3.0% (the lowest)

North Dakota is exceptional among states spending the most because the wealth of its residents is a relatively recent development. Annual personal spending growth has led the nation for several years. Between 2011 and 2012, total personal consumption expenditure rose by 11.5%, far more than any other state. Increased spending has accompanied staggering growth rates for the state’s economy. Due to the recent oil boom, the state’s economic output has roughly doubled over a 10 year period. North Dakota’s unemployment rate was the lowest in the country as of June, at just 3.0%.

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2. Connecticut
> 2012 spending per capita: $45,800
> Personal income per capita: $59,687 (the highest)
> Pct. bachelor’s degree: 37.1% (3rd highest)
> June unemployment rate: 6.4% (tied-19th highest)

Connecticut residents spent an average of $45,800 in 2012, more than $10,000 above the national average. Yet, between 1997 and 2012, total expenditure grew at an annualized rate of 4.4%, one of the lower rates in the country. Low expenditure growth may be expected in states where spending was already high. Higher expenditure levels may also be tied to education. More than 37% of Connecticut adults had at least a bachelor’s degree, the third-highest rate in the country. As a share of personal income, however, residents spent 76.7% in 2012, the fifth-lowest share in the country.

1. Massachusetts
> 2012 spending per capita: $47,308
> Personal income per capita: $55,976 (2nd highest)
> Pct. bachelor’s degree: 39.3% (the highest)
> June unemployment rate: 5.6% (20th lowest)

Massachusetts residents spent $47,308 per capita in 2012, more than people in any other state. Total consumption expenditure has also been among the highest nationwide since at least 2007. Massachusetts consumers spent well over $300 billion in 2012, the 10th highest in the country. Like a majority of states on this list, Massachusetts has exceptionally high levels of educational attainment. In 2012, nearly 40% of adult residents had at least a bachelor’s degree, more than any other state. This likely contributed to higher incomes, which in turn helped people in the state to adopt more flexible and generous spending habits. Nearly 8.0% of households earned at least $200,000 in 2012, more than all but three other states. A typical household earned more than $65,339 that year, well above the national median household income of $51,371.