Incomes Grow at Fastest Rate since February

July real disposable income was $12,216 billion dollars (seasonally adjusted at an annual rate). This was an all-time high for real disposable income. In July, disposable income grew 3.3 percent compared with one year ago. This was the fastest rate of growth since February 2015. However, the month-over-month rate of growth has fluctuated between just 3.0 and 3.3 percent the last five months. The annual rate of growth accelerated to 3.3 percent, which was its fastest rate of growth since March 2007. This is a positive sign for future consumer spending. But, it seems likely that annual income will peak soon given the slower growth in the month-over-month rate of change.

Real disposable income is one of the earliest leading indicators for the following end markets: aerospace; construction materials; custom processors; electronics/computers/telecommunications equipment; food/beverage processing; forming/fabricating (non-auto); hardware; HVAC; industrial motors/hydraulics/mechanical components; machinery/equipment manufacturing; metalcutting job shops; oil/gas field/mining machinery; power generation; primary metals; and printing.