Consumer Durable Goods Spending Up 3.2% in February
While income continues to contract month-over-month, spending on consumer durable goods has grown month-over-month for six out of the last seven months. Government transfers, accelerated tax refunds, and a decline in the savings rate are allowing spending to grow while income falls. According to the Bureau of Economic Analysis, real consumer durable goods spending in February was 3.2% higher than it was in February 2009. However, February’s spending of $1,126.8 billion (seasonally adjusted at an annual rate) is lower than each of the last three months. And, it is only 1.8% higher than July 2009. The chart shows that actual spending has been flat since July 2009 after moving up off the bottom seen in October 2008 through June 2009. The 12-month rate of change continues to show a decelerating contraction. If spending remains relatively flat, the rate of change curve will indicate growth starting in April, and the rate of growth will peak sometime this summer. To see more on how consumer durable goods spending leads the metalworking industry go here.