April 21, 2026

US Services Spending Rose $105.7 Billion in January

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Americans love to spend on experiences. However, how they’re spending is shifting completely. A report from the Bureau of Economic Analysis in January suggested that consumers’ spending on services rose by $105.7b in a single month. Without question, that number is impressive.

Something worth noting, however, is that spending on physical goods dropped by over $24.9 billion over the same period. That’s a huge difference. One increased by hundreds of billions, and the other dropped by tens of billions. This indicates a huge shift in consumer spending from real physical goods to services.

Where the Money Is Going

The shift we’re seeing here hasn’t come out of the blue. It’s been slowly building momentum over the last few years. January 2026 was just the first time we saw consumer spending structurally change.

According to the same report, this money is going to costs like healthcare, housing, and utilities (services), financial services and insurance, and entertainment. Americans are spending less on are physical goods, like clothes, footwear, and food.

This is very consistent with what the US Bank’s 2026 consumer spending analysis identified. It said that digital and non-store retailers are sitting at a 7.5% YOY growth, while food services rose by just 5.2%.

It makes sense as well. Digital services, especially in sectors like entertainment, are far cheaper. A night watching a good film at home is far cheaper than going to the movie theater.

How Service Businesses Are Winning

With so much money changing the way it flows through the economy, businesses have started paying attention.

Streaming services, for example, have started going exclusive and fragmenting the industry. Netflix, Disney+, and Apple TV+ have invested billions of dollars in producing shows and movies that cannot be found anywhere else.

Online entertainment has taken a similar approach. In the casino sector, platforms now offer exclusive casino games that cannot be found elsewhere. The goal is similar. They want to get people onto their platform by appearing unique.

Even fitness has followed this path. Peloton has built its entire brand around instructor-led classes that you can only access via its ecosystem. You can’t get more exclusive than this. A consumer needs to buy their products and memberships to fully benefit from their goods.

Across all industries, it’s identical. Businesses want to create something that users cannot get anywhere else.

What This Means for the Broader Economy

Consumer spending drives nearly 70% of US GDP. When spending shifts, like what we’re seeing, it impacts the entire economy. Retailers, restaurants, and any businesses selling physical goods will feel the impact.

Service-based businesses, particularly those that are digital, won’t slow down at all, they’ll speed up. The amount of money that will flow through this side of the economy is about to increase rapidly.

Don’t get us wrong, both types of businesses will stand. There are still consumers purchasing physical goods, obviously. However, a shift is happening, and that shift is towards digital-based services.