Consumer Spending Growth Rate Stable in September

Real consumer spending in September 2015 was $11,298 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. The month-over-month rate of growth in consumer spending was 3.2 percent. Since October 2014, the month-over-month rate of change has been 3.2 percent six of the 11 months and has fluctuated in a narrow band otherwise. This rate of growth is virtually at the historical average. The annual rate of change was unchanged at 3.2 percent. It has been at this level four of the last five months. While the annual rate of change could accelerate some in the next few months as a result of moderately accelerating growth in disposable income, shorter term data in both disposable income and consumer spending indicate that consumer spending is near its peak rate of growth.

Durable goods spending also hit an all-time high in July. The month-over-month rate of growth accelerated to 6.2 percent, which was the fastest since May. Also, this was above the average historical growth rate. The annual rate of was unchanged at 6.7 percent, which is the slowest rate of growth since December 2014. It does appear that durable goods spending growth has hits its peak rate this cycle. This month 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.