Consumer Spending Grows at Slowest Rate since July 2014
Real consumer spending in October 2015 was $11,293 billion real dollars (seasonally adjusted at an annual rate). As is the case almost every month, this was an all-time high in consumer spending. However, while income figures were generally revised higher spending figures were generally revised lower. The month-over-month rate of growth in consumer spending was 2.7 percent. The rate of growth in October was the slowest since July 2014, and the rate of growth has decelerated since May 2015. The annual rate of change was unchanged at 3.2 percent. It has been at this level five of the last six months. Based on the trend of recent months, it appears consumer spending has hit its peak rate of growth.
Durable goods spending also hit an all-time high in October. The month-over-month rate of growth decelerated to 5.6 percent. This was exactly the average historical growth rate. The annual rate of growth decelerated to 6.4 percent, which is the slowest rate of growth since December 2014. The rate of growth has decelerated since its peak in May. For the third month in a row durable goods spending was 13.2 percent of all consumer spending, which was an all-time high as well. Durable goods spending continues to represent an ever-increasing portion of consumer spending because of historically and artificially low interest rates.
Real consumer spending (or its sub-components such as medical care spending) is an important leading for a number of durable goods end markets: construction materials; custom processors; durable goods; food/beverage processing; forming/fabricating (non-auto); hardware; HVAC; industrial motors/hydraulics/mechanical components; machinery/equipment manufacturing; medical; metalcutting job shops; oil/gas field/mining machinery; power generation; primary metals; and printing.
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