Disposable Income Growth Accelerates

According to the Bureau of Economic Analysis, November real disposable income was $12,068 billion real dollars (seasonally adjusted at an annual rate). This is the second highest level of income ever (only December 2012, which was artificially inflated due to tax law changes, was higher). The month-over-month rate of change in November was 2.9%. This was the fastest rate of month-over-month growth in disposable income since the articifically inflated months of November and December 2012. The annual rate of change, now 1.8%, has grown at a faster rate every month in 2014. This is the fastest rate of annual growth in disposable income since May 2013. However, the rate of growth is still barely above half the historic average rate of growth in disposable income, which is 3.1%.

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.