Economic News Blog
Posted by: Steven Kline, Jr. 1. February 2013

December Consumer Spending Increases 2.2%

 According to the Bureau of Economic Analysis, real consumer spending in December 2012 was $9,706 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 December. Spending in December 2012 was 2.2% more than it was in December 2011, which is the fastest rate of month-over-month growth since July 2011. Despite month-over-month growth of more than 2.0% in November and December, the annual rate of change has remained relatively flat since March 2012. The current rate of annual growth in real consumer spending (1.9%) is almost half of the historical average (3.2%). Faster growth in real personal income is signaling faster growth in real consumer spending in the first half of 2013, which can be seen in the charts below. An acceleration in the annual growth rate of real consumer spending would indicate an acceleration in the annual growth rate of industrial production in the first half of 2013 as spending leads production by zero to six months.

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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