Real Disposable Income Grows at Slowest Rate of 2014

According to the Bureau of Economic Analysis, May real disposable income was $11,851 billion real dollars (seasonally adjusted at an annual rate). This is the second highest level of income ever (only December 2012 was higher). The month-over-month rate of change in May was 1.9%. This is the fourth month in a row that the month-over-month rate of change has grown at a slower rate. The annual rate of change, now 1.4%, has gradually accelerated the last five months. Despite the accelerating growth, the annual rate of growth in disposable income over the last five months has been slower than the rate of growth at any time since December 2010. If the monthly trend continues, then it is likely that there will be only a few more months of accelerating annual growth.

Real disposable income is one of the earliest leading indicators for the following end markets: aerospace; construction materials; custom processors; electronics, computers and telecommunications equipment; food and beverage processing; forming and fabricating (non-auto); hardware; HVAC; industrial motors, hydraulics and mechanical components; machinery and equipment manufacturing; metalcutting job shops; oil, gas field and mining machinery; power generation; primary metals; and printing.