Consumer Spending Growth Fastest since September 2015

(Negative) Real consumer spending in July 2016 was $11,565 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 3.0 percent. The month-over-month rate of change has accelerated the last two motnhs and July's growth rate was the fastest since September 2015. However, the current rate of growth has been below the historic average of 3.3 percent since July 2015. The annual rate of growth remained at 2.7 percent, which was the slowest rate of annual growth since October 2014. The growth rate has decelerated since July 2015. 

In July, durable goods spending grew 6.3 percent, which was the fastest rate of month-over-month growth since September 2015. Also, that was the first month of above average growth since last September. The annual rate of growth was below the historic average for the third consecutive month. While weak growth in motor vehicle and parts spending was a significant reason for the recent deceleration in durable goods spending, motor vehicle and parts spending grew 3.3 percent this month. That was its fastest rate of growth since July 2015, although it was still quite a bit below average. 

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.