Consumer Spending Growth Slows for Second Month

Real consumer spending in November 2015 was $11,323 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 2.5 percent. This was the second month in a row the rate of growth was below 3.0 percent. It was the fourth month in a row the rate of growth has been below the historical average. And, the rate of growth in November was the slowest since May 2014. The annual rate of growth decelerated to 3.1 percent. The annual rate of growth peaked in July at 3.3 percent.

Durable goods spending also hit an all-time high in November. However, the month-over-month rate of growth decelerated for the second month in a row to 4.8 percent. This was the slowest rate of growth since February 2014 and is below the historical average. The annual rate of growth decelerated to 6.2 percent, which is the slowest rate of growth since December 2014. The rate of growth has decelerated since its peak rate of growth of 7.0 percent in May. Durable goods spending was 13.3 percent of all consumer spending, which was an all-time high as well. Durable goods spending continues to represent an ever-increasing portion of consumer spending because of historically and artificially low interest rates.

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.