Americans are spending their money on 3 major categories

Americans Making and Spending More Money
Americans Making and Spending More Money

It's no secret that Americans don't want to buy clothes.

That fact keeps proving itself to be true: for the month of May, consulting firm Conlumino notes that once again, apparel sales dropped off by 2.4%.

However, Neil Saunders, CEO of Conlumino, noted three categories that have captured consumers' wallets: home improvement, beauty, and sports.

Here's why those three categories are appealing.

Home improvement

It appears that people are willing to spend money to make their homes look nice.

"Home improvement is benefiting from the recent elevated levels of activity in the housing market which have boosted spend on decorating and other products as consumers fix up their new homes. Home improvement is also seen as an investment in the value of the home, which often helps consumers to justify their purchases," Saunders wrote in an email to Business Insider.

Beauty and drug store goods

Make no mistake: young people love spending money on makeup.

When Goldman Sachs and Teen Vogue polled fashion-forward women ages 13 to 29 to find out their favorite brands, MAC Cosmetics came out on top. Other cosmetic companies in the top 10 included Sephora, Urban Decay, and Make Up For Ever, proving that young women feel strongly about cosmetics. It's not just high-end stores that are thriving; for the first quarter of fiscal 2016, CVS saw same store sales increase by 4.2% and net revenue increase an impressive 18.9%.

Saunders pointed to a few reasons that beauty is getting more pickup , including how it can viewed as a "small indulgence," people are obsessed with maintaining their youthful veneers, and social media stars and bloggers spurring interest in beauty trends.

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This is a tricky category, as "sports is patchy overall," as Saunders put it — considering that the apparel industry is largely suffering and Sports Authority is in the process of liquidating. But on a broader scheme, it's strong, whether it's athleisure (Lululemon, Under Armour, and Nike all have reported strong sales), sneakers (even Skechers is dominating), or fitness equipment. As people become more and more invested in their health, they're willing to throw down more money on fitness.

Separately, Conlumino pointed out in a note to clients that the food service category grew, just at a slower rate than it had previously.

As one category improves, another category fails.

"One of the interesting things is that categories are now competing for spend with each other like never before. Consumers still feel constrained and have limited budgets." He said. "This means that buying something in one category could mean another category loses out!"

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