Consumer Spending Increases 2.7% in April 2014
According to the Bureau of Economic Analysis, real consumer spending in April 2014 was $10,962 billion real dollars (seasonally adjusted at an annual rate). Spending in April 2014 was 2.7% more than it was in April 2013. This is the second fastest rate of month-over-month growth since July 2011. The last two months represent the fastest rate of monthly growth in consumer spending since March and April 2011. While the annual rate of growth is still almost 33% below the historical average rate of annual growth, the slightly accelerating growth in real consumer spending is a positive sign for manufacturing. Annual growth in incomes has accelerated for four months, which should lead to further acceleration in consumer spending into the fall.
The month-over-month rate of change in real consumer durable goods spending has nearly doubled in the last two months compared to the previous three months. The annual rate of change has stabilized at 6.3%, which is slightly ahead of the historical average. Accelerating incomes and falling real interest rates are pointing to increased spending on consumer durable goods.
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 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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