Consumer Spending Growth Continues at Constant Rate
According to the Bureau of Economic Analysis, real consumer spending in May 2013 was $9,763 billion real dollars (seasonally adjusted at an annual rate). As is the case almost every month, real consumer spending hit a new all-time high in May. Spending in May 2013 was 1.9% more than it was in March 2012. Since August 2011, the month-over-month growth rate has been virtually constant at 1.9%, which is roughly half of average historical growth rate. Consequently, the annual rate of growth, 1.9%, has been flat since April 2012. The recent acceleration in growth in real personal incomes is indicating that we should see an acceleration in the rate of growth in real consumer spending. This is a positive sign for the prospects of durable goods manufacturing.
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; food and beverage processing; forming and fabricating (non-auto); hardware; HVAC; industrial motors, hydraulics and mechanical components; machinery and equipment manufacturing; medical; metalcutting job shops; oil, gas field and mining machinery; power generation; primary metals; and printing.
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