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Consumer Savvy

Blacks' Spending Power Growth Outpaces Average

July 30, 1998| From Associated Press

ATLANTA — Black consumers' spending power is growing faster than the national average as blacks are gaining ground in all 50 states, according to a survey released Wednesday.

"It illustrates the growing importance of African Americans as consumers," said Jeffrey M. Humphreys, a University of Georgia economic forecaster who wrote the study by the school's Selig Center for Economic Growth. "That's important to those who market and those who pay for advertising."

Reflecting black consumers' greater impact on the economy, the study forecasts that they will account for 8.2% of total buying power in 1999, compared with 7.4% in 1990. It defines buying power as after-tax personal income.

"Every year since 1990, the percentage gain in black buying power has been greater--or is predicted to be greater--than the growth rate for consumers overall," Humphreys said.

The black population is also growing faster than the U.S. population overall--14% for blacks this decade versus 9% for the nation.

Humphreys said black buying power will rise from $308 billion in 1990 to $533 billion in 1999, up nearly 73% in less than a decade, compared with the national increase of nearly 57%.

Using government statistics and economic models, the study said that total black buying power was highest in New York, estimated at $60.9 billion; was second-highest in California, estimated at $40.9 billion; and was most concentrated in the District of Columbia, with 39.1% of the share of all buying power.

Idaho had the biggest rise in black buying power in the 1990-99 period, 200.5%. It is one of several states with small black populations that showed big increases.

No one state made the top 10 in all three state rankings--black buying power in dollars, black percentage of a state's total buying power and the percentage growth rate of black buying power.

A strong job market for blacks, overall national economic expansion and educational progress all contribute to the rise, said Humphreys, who is completing similar surveys of Latino, Asian American and American Indian buying power.

For many businesses, capturing black spending can make the difference between success and failure, the study said.

Humphreys noted that there's been an increase in black-oriented advertising and black media outlets as marketers try to tailor their messages to minority segments.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Big Money

Top 10 states in terms of total spending by African Americans. Projected total dollar value of spending in 1999, in billions of dollars:

New York: $60.9

California: 40.9

Texas: 35.3

Florida: 30.7

Georgia: 30.4

Illinois: 29.4

Maryland: 27.9

North Carolina: 24.1

New Jersey: 23.4

Michigan: 22.9

*

Source: University of Georgia's Selig Center for Economic Growth

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