Nov 152011

U.S. Hispanic purchasing power is close to $1 trillion. Let’s put that into perspective.

Gross domestic product or GDP is the market value of all the goods and services produced from a nation. U.S. Hispanics would have greater value than some of the world’s largest nations using a 2010 list from the International Monetary Fund :
#16 Netherlands   $780.7 billion
#17 Turkey   $735.5
#18 Indonesia   $706.8
#19 Switzerland   $527.9
#20 Poland   $569.4
#21 Belgium   $467.8
#22 Sweden   $458.7
#23 Saudi Arabia  $448.4
#24 Taiwan   $429.8
#25 Norway   $413.0

And with a population of 50.5 million, Hispanics in the U.S., if they were a stand-alone country,  are larger than the nations of:

Spain    45,200,737
Colombia   44,075,701
Argentina   41,000,000
Peru    28,674,757
Venezuela   28,199,822
Chile    16,598,074
Guatemala   13,354,000
Ecuador    13,341,000
Cuba    11,268,000
Dominican Republic  9,760,000
Bolivia    9,525,000
Honduras   7,106,000
El Salvador   6,857,000
Paraguay   6,127,000
Nicaragua   5,603,000
Costa Rica   4,468,000
Puerto Rico   3,991,000
Panama    3,343,000
Uruguay    3,340,000

Nov 082011

Call it discretionary spending. Or after tax spending. Or buying power. It’s the money you have left over to spend after the taxes come out of your paycheck.

While putting together a Hispanic Insights presentation I came across a variety of sources each using their own proprietary methodology, their secret sauce, to estimate consumer expenditures.
A July 16, 2011 article in the National Journal by Luis Alberto Moreno, President of Inter-American Development Bank, puts the purchasing power of Latinos in the U.S. at $1.3 trillion a year.

An October 28, 2011 article titled “Follow The Money, It Leads to the Latino Market” by Pablo Schneider mentions a speech by Solomon Trujillo which puts the U.S. Hispanic market at $1.1 trillion and would make it the world’s 11th largest economy.

No research companies were sourced for those numbers in the above articles. So let’s make this an interactive blog item. The people who find the source for those numbers and other unanswered questions in this article will get universal recognition by name in next Tuesday’s column. Or if you want to do a good deed but remain anonymous we can accommodate that too.

At a page on their website called “How Big is the Latino Market?” cites a Global Insight number of $1.04 trillion in disposable income for 2009.

We can continue down the spectrum from highest to lowest number. The well respected Selig Center For Economic Growth shows U.S. Hispanic buying power for 2009 to be $978.4 billion. But don’t despair. For all you folks who want to hit that magic trillion dollar mark it shows up in a chart at $1.330 trillion in 2014.

According to Synovate’s 2010 U.S. Diversity Markets Report Hispanic buying power in 2010 was $957,320,606,548. How’s that for being exact.

Geoscape’s 2011 projections for U.S. Hispanic aggregate expenditures is $614,414,679,368.

The 2010 Consumer Expenditure Survey was just released by the U.S. Bureau of Labor Statistics.  And for the first time, in this blog, I can actually calculate the number right here and now for you. Step right up. There’s enough room for everyone to have a clear view. There’s nothing up my sleeve. 14,754,000 U.S. Hispanic consumer units times $41,456 average annual expenditures for U.S. Hispanics equals $611,641,824,000.

And now for the head scratching portion of the show. Ad Age’s 2011 Hispanic Fact Pack has a chart from the Experian Simmons National Consumer Study Feb 2010 – March 2011 that puts Total U.S. Hispanic discretionary spending at $129,4 billion. How can that be so far off from the other numbers that we have seen? When we read the fine print it mentions that this chart only includes purchases of tobacco, alcohol, education, reading, personal care, apparel and entertainment. Oh, OK. It then buries the lede(as we say in the media) and says total U.S. Hispanic discretionary spending is $1.47 trillion. Wow, that moves them to the head of the class. That’s the highest number so far.

I wish I could show you the Nielsen/Claritas buying power number or the one from Sales & Marketing Management’s EBI(Effective Buying Income) from their Survey of Buying Power or ESRI’s consumer spending projections as a comparison. Hint. Hint.  

So the question remains. Do we just quote the largest number available or the one from the source you choose to purchase or the one with the most respected methodological pedigree or the one you can calculate yourself or …