Electricity at One and a Third Percent

July 25’s Gross Domestic Product report for the second quarter was encouraging. It showed the economy continues to grow at a healthy pace.

In the report’s details, the data on what American households paid for electric utility service was also encouraging. Though they spent two hundred and fifty-eight billion dollars for electricity, on an annualized basis, this amounted to just one and one-third percent of their expenditures for all goods and services, or 1.33 percent.

If you look at what American households paid for electric service in the second quarter of each of the last twenty years, the percent of expenditures for all goods and services was lower in the second quarters of 2023 and 2021, at 1.25 percent and 1.24 percent. This was clearly because of the surge in total consumer spending in those pandemic years.

But electricity’s percent of expenditures for all goods and services was higher in the second quarters of all the other years over the last twenty, going back to 2005. And electricity’s percent was considerably higher in the second quarters of all dozen years from 2005 through 2016, always equal to or greater than 1.40 percent.

Indeed, in the great recession years of 2009, 2010, and 2011, second quarter electric bills were as much as 1.57 percent, 1.61 percent, and 1.58 percent of expenditures for all goods and services.