several years - a finding that should remind us of the pitfalls of reading too much into any year - to - year change in our measures of economic well - being. the bls ’ s consumer expenditure data suggest a rise in inequality over the 1980s comparable to that shown by the census family income figures. however, during the first half of the 1990s, inequality partially receded for consumer expenditures while for income it continued to rise ( table 1 ). the consumption data used in these calculations include only what individuals purchase directly out of their incomes and accumulated savings. recently, researchers have extended the analysis using a more complete and more theoretically appealing measure of consumption that includes the indirect flow of services from the stock of durable goods that they already own - houses, vehicles, and major appliances. 5 as one might expect, although this measure of consumption has a profile somewhat similar to that seen in the current expenditure data over the 1980s and the first half of the 1990s, it shows still lower levels of inequality overall and a clearer pattern of consumption smoothing during the 1981 - 83 recession. the information available from the consumer expenditure survey can be used to calculate another interesting measure of the well - being of households : changes in inequality in the ownership of consumer durables. the bls staff has updated tabulations of these data that they prepared - 3for me several years ago ( table 2 ). of course, ownership rates for household durables clearly rise with income. but for a number of goods - for example, dishwashers, clothes dryers, microwaves, and motor vehicles - the distribution of ownership rates by income decile has become more equal over time. even though we may be able to develop an array of measures of current and past trends in inequality - such as those that i have described and potentially others that may be presented at this symposium - we will likely still face considerable uncertainty about how to interpret those measures and about what the future may hold for the trend and the distribution of economic well - being. wealth has always been created, virtually by definition, when individuals use their growing knowledge, in conjunction with an expanding capital stock, to produce goods and services of value. the process of wealth creation in the united states has evolved in a number of important ways. over the last century, we have learned how to be more efficient in meeting the needs of consumers, and thus we have moved from producing essentials to the production of more discretionary goods and services. moreover, these goods and services have been, over

one. for goods that have ownership rates that are relatively equal across deciles, regardless of the level of the ownership rate, the probability distributions are fairly flat with values for pi close to 0. 1. for goods that are more concentrated among the affluent households, the probability distributions tend to rise across the income deciles. - 5 * * * footnotes 1 arthur b. kennickell and r. louise woodburn, “ consistent weight design for the 1989, 1992 and 1995 scfs, and the distribution of wealth, ” manuscript, august 1997. 2 arthur b. kennickell and annika e. sunden, “ pensions, social security, and the distribution of wealth, ” finance and economics discussion series, 1997 - 55, board of governors of the federal reserve system, november 1997. 3 martha starr - mcclure, “ stock market wealth and consumer spending, ” finance and economics discussion series, 1998 - 20, board of governors of the federal reserve system, april 1998. 4 these results were originally reported in report on the american workforce, u. s. department of labor, 1995 and will appear in david s. johnson and stephanie shipp, “ inequality and the business cycle : a consumption viewpoint, ” forthcoming, journal of empirical economics. david s. johnson of the u. s. bureau of labor statistics provided the updated data shown in table 1. 5 david s. johnson and timothy m. smeeding, “ measuring trends in inequality and individuals and families : income and consumption, ” mimeo., march 1998.