Economic News Blog
Posted by: Steven Kline, Jr. 8. August 2016

Consumer Spending Growth below Average for 11th Month

(Negative) Real consumer spending in June 2016 was $11,514 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 2.8 percent. In ten of the last 11 months the rate of growth has been below 3.0 percent. This is significantly below the historical average of 3.3 percent. The annual rate of growth remained was 2.7 percent, which was the slowest rate of annual growth since October 2014. The growth rate has decelerated since July 2015. 

In June, durable goods spending grew 4.6 percent, which meant it was below average for the eighth month in a row . The annual rate of growth, now 5.2 percent, has decelerated since its peak in May 2015. Also, the annual rate of growth was below the historic average for the second consecutive month. A significant reason for the decelerating growth in durable goods spending was that motor vehicle and parts spending has contracted the three of the last four months. However, durable goods spending accounted for 13.5 percent of all consumer spending, which is virtually its highest proportion ever.

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 materialscustom processorsdurable goodsfood/beverage processingforming/fabricating (non-auto)hardwareHVACindustrial motors/hydraulics/mechanical componentsmachinery/equipment manufacturingmedicalmetalcutting job shopsoil/gas field/mining machinerypower generationprimary metals; and printing.

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