Income Growth Above Average for Sixth Month

May real disposable income was $12,317 billion dollars (seasonally adjusted at an annual rate). This was an all-time high for real disposable income. In May, disposable income grew 3.5 percent compared with one year ago for the second month in a row. This was the sixth straight month of above average growth (3.1 percent is the historical average growth rate for disposable income). The annual rate of change has recorded accelerating growth since January 2014. The current rate of annual growth was 3.1 percent, which was the fastest rate of growth since May 2007. It appears that disposable income will see further accelerating growth over the next few months, but there are signs that it is nearing its peak rate of growth.

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.