More Americans Have Discretionary Income

New York, NY, November 9, 2007--About 73 million U.S. households now have discretionary income, up from about 57 million in 2002, according to a report by The Conference Board. The percent of the U.S. population with discretionary income has increased to nearly 64%, up from 52% in 2002.

Total discretionary income in the U.S. topped $1.7 trillion in 2006, with the household average at $24,335. Per capita income stood at $9,148.

Nearly 78% of all discretionary income is held by households earning more than $100,000. Average discretionary income for this segment, $66,451, is 2.7 times the national average.

Households with discretionary income, as defined by the study, are those whose spendable income exceeds that held by households with similar demographic features.

"While the percentage of households with discretionary income has risen over the past several years, purchasing power remains concentrated in the wallets of the affluent," says Lynn Franco, director of The Conference Board Consumer Research Center. "More than three out of every four discretionary dollars flows to householders earning $100,000 or more. And their average discretionary income is more than 2.5 times above average."

The region with the wealthiest concentration of households is New England (including Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont). About 63% of households have discretionary income, with an average amount of $27,337.

Household discretionary income is lowest in the West North Central region (including Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota). Average household discretionary income in this region is $20,749.

California, the most populous state, is also the state with the largest number of households with discretionary income — 8 million. These households hold $224.7 billion in total discretionary income.

Texas has the second highest number of households with discretionary income — more than 5 million, with $136.8 billion in total discretionary income. Other top states include Florida, with almost 4.7 million households holding $126.1 billion, and New York, with about 4.6 million households holding $119.4 billion in discretionary income.

Other findings:

·         The top end of the affluent group (households with earnings of $200,000 and over) accounts for only 3% of total households and 5% of households with discretionary income. This group, however, has 38% of total discretionary income with an average of $173,613, more than seven times the national average.

·         Households with earnings of less than $50,000 represent nearly 60% of all households and 29% of households with discretionary income. However, they account for only 3% of aggregate discretionary income. Average discretionary income among this market is about $1,900.