Dispoable Income Grows Slower

November real disposable income was $12,416 billion dollars (seasonally adjusted at an annual rate). This was an all-time high for real disposable income. In November, disposable income grew 3.5 percent compared with one year ago. This is below the long-term historical average. However, the month-over-month rate of growth has decelerated two months in a row. As a result, the annual rate of growth, now 3.6 percent, was unchanged for the third straight month. It certainly appears that disposable income growth is set to slow as we head into 2016, just as the Fed begins raising interest rates.

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.