Income Growth Remained Weak in July

(Negative) July real disposable income was $12,705 billion dollars (seasonally adjusted at an annual rate). This was an all-time high for real disposable income. In July, real disposable income grew 2.7 percent compared with one year ago. The month-over-month rate of growth was below 3.0 percent in four of the last five months. The annual rate of growth has decelerated steadily since August 2015. In July, the annual rate of growth, now 3.0 percent, was the slowest since November 2014. Also, this was the second month in a row that the annual rate of growth was below the historic average.

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.