Consumer Spending Growth 3.0 Percent in April

(Negative) Real consumer spending in April 2016 was $11,468 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 3.0 percent. This was the first time since September 2015 that the month-over-month rate of growth was 3.0 percent or more. However, the rate of growth remained below the historical average of 3.3 percent. The annual rate of growth remained at 3.0 percent for the fourth straight month, which was the slowest rate of annual growth since January 2015. The growth rate has decelerated since July 2015. And, despite the faster growth in April, it appears that the growth rate is poised for even slower growth in the upcoming months.

Durable goods spending grew at its fastest month-over-month rate since September 2015. In April, durable goods spending grew 5.5 percent, which was just barely below the historica average. The annual rate of growth, now 5.2 percent, was unchanged from last month but was at its slowest rate of growth since September 2014. Also, the annual rate of growth was below the historic average for the third month in a row. A significant reason for the decelerating growth in durable goods spending was that motor vehicle and parts spending has contracted the four of the last five months.

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.