It's a growth industry.

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Cell Phones, Books and Other Hot Buys

Justin Fox is a Bloomberg View columnist. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”
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Sometimes there are things that you know, but you don't really know till you see them in a chart. So while it isn't at all surprising that consumer spending on landline telephone service has dropped a lot during the past decade and a half, and that spending on cellular service and Internet access has risen a lot, it is still quite something to see the magnitude of the shift:

This is from the U.S. Bureau of Economic Analysis's monthly data on consumer spending. February's numbers were released on Monday, and all the attention was on the short-term economic implications, which were negative or positive or something. But -- as with monthly payroll employment -- the spending numbers also tell fascinating stories of longer-run economic change.

Some of the consumer spending statistics go all the way back to 1929, but for monthly numbers converted into chained 2009 dollars, 1999 is the beginning of history. For the mobile and Internet revolution, that happens to be a pretty good place to start. The telecommunications industry as we knew it in the 1990s -- that is, landlines, mostly -- is a mere shell of its former self. But it has given way to an even bigger, richer telecommunications industry. Who says disruptive innovation isn't fun?

The disruption of the securities business in the U.S. started well before the 1990s, with the deregulation of brokerage commissions in 1975. But it has continued to play out dramatically over the past 15-plus years:

This wasn't exactly a surprise to me either, in part because I made a similar chart tracking employment at securities brokerages, portfolio managers and investment advisers a couple of months ago. But it is striking how, once again, the income stream that was once the core of the securities business has declined, but the securities business -- broadly defined -- has grown.

Book publishing must look different, though, right? Surely consumer spending on books has declined. Well, a little (it peaked in January 2002, at $43.4 billion). But overall sales seem to have hit bottom five years ago, and all the decline has been in educational books:

The biggest surprise here may be that our government not only tracks consumer spending on books but breaks it down into recreational and educational reading. The decline in educational book sales surely has something to do with the rise of new digital educational methods. Also, I guess this is why Pearson is trying to take over our classrooms -- we're not buying enough of their textbooks any more. The continuing rise in recreational book sales, meanwhile, is interesting and encouraging. Before too long we may be spending more on pleasure reading than on landline phone service. 

  1. Encouraging to me, at least, since I write for a living.

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Justin Fox at

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