Economic News Blog
Posted by: Steven Kline, Jr. 4. February 2015

Disposable Income Surges in December

According to the Bureau of Economic Analysis, December real disposable income was $13,190 billion real dollars (seasonally adjusted at an annual rate). This was the highest level of disposable income ever, exceeding even December 2012 that was artificially inflated due to tax law changes. In addition, the month-over-month rate of growth was 3.7% in December. The historical average month-over-month rate of change is 3.1%. This is the first month of above average growth (excluding the end of 2012, again due to the artificially inflated incomes) since March 2011. This pushed the annual rate of growth to 2.4%, which was the fastest rate of growth since March 2013. We should see further acceleration in the annual rate of change over the next few months. This was a very positive report for the future of durable goods manufacturing.

Real disposable income is one of the earliest leading indicators for the following end markets: aerospaceconstruction materialscustom processorselectronics/computers/telecommunications equipmentfood/beverage processingforming/fabricating (non-auto)hardwareHVACindustrial motors/hydraulics/mechanical componentsmachinery/equipment manufacturingmetalcutting job shopsoil/gas field/mining machinerypower generationprimary metals; and printing.

Comments are reviewed by moderators before they appear to ensure they meet Gardner Business Media’s submission guidelines.
blog comments powered by Disqus