Guess the number
In BLS data, the lowest-income fifth of US households reports spending what share of its income?
About 209%: $37,935 of spending on $18,125 of income. BLS says underreported income is the main reason.
Key facts
- The lowest-income fifth of US households reported average pre-tax income of $18,125 in 2025, but average spending of $37,935: 209% of income.
- The highest-income fifth spent 56% of its income.
- BLS says the main reason is underreported income, along with savings drawn down during unemployment, business losses among the self-employed, and households whose low income is temporary.
Spending exceeds income for the poorest Americans in official data, and by a wide margin. In the Bureau of Labor Statistics’ Consumer Expenditure Survey, the lowest-income fifth of households reports spending more than twice its income. That does not mean these households are living on credit at twice their means. The explanation lies in how income and spending are measured.
Published November 2026. All figures: BLS Consumer Expenditure Survey 2025, averages per consumer unit (similar to a household) by income fifth. Income is before taxes.
Income and spending by income fifth, 2025
Table of Contents
| Income group | Average pre-tax income | Average spending | Spending as share of income |
|---|---|---|---|
| Lowest fifth | $18,125 | $37,935 | 209% |
| Second fifth | $46,080 | $51,405 | 112% |
| Middle fifth | $78,584 | $68,983 | 88% |
| Fourth fifth | $126,349 | $92,250 | 73% |
| Highest fifth | $286,188 | $159,512 | 56% |
Why spending exceeds income at the bottom: what BLS says
The BLS’s own technical notes on the Consumer Expenditure Survey give these reasons:
- Underreported income. BLS describes underreporting of income by survey respondents as the primary reason, a problem common to most household surveys.
- Savings during hard times. Households whose members have a spell of unemployment may draw on savings to keep spending.
- Self-employment losses. Self-employed people can report business losses, lowering their measured income while their spending continues.
- Temporarily low income. Some households classified in low income groups have spending more typical of higher income groups, for example because their low income is temporary, which raises the group’s average spending.
BLS also notes that lower-income households are, on average, smaller and have fewer earners, and that for them wages are a smaller share of income than for higher-income households.
What it means
- Read the 209% carefully. It is not evidence that the poorest households borrow twice their income each year; much of the gap is measurement.
- Spending is a better guide to living standards at the bottom, which is why many researchers rank households by spending rather than income.
- The top fifth’s lower spending share (56%) reflects taxes and saving.
Explore the data
- US household spending by income level and spending growth by income
- Where Americans’ Money Goes, 2025
Questions
Do the poorest Americans spend more than they earn?
In BLS survey data, the lowest-income fifth reports spending 209% of its pre-tax income, but BLS attributes much of this to underreported income and other measurement factors.
Why is income underreported in surveys?
Respondents may not report all sources, such as irregular work, benefits or transfers, accurately; BLS describes this as common to most household surveys.
Sources
- US Bureau of Labor Statistics, Consumer Expenditure Survey 2025, table by quintiles of income before taxes.
- BLS, Consumer Expenditure Survey technical notes and "Getting the most from CE tables" guidance.
See our methodology. Cite as: Advanton (2026), "The Poorest 20% of Americans Report Spending Twice Their Income".
Last reviewed November 13, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.