Durable Goods Spending Maintains Record High

Durable-goods spending accounted for its largest share of all consumer spending ever for the second month in a row, but the rate of growth in consumer durable goods spending has flattened recently.

After a significant data revision, durable goods spending accounted for its largest ever share of all consumer spending for the second month in a row at 13.0 percent. However, the rate of growth in consumer durable goods spending has flattened recently.

In June, the month-over-month rate of growth was 6.6 percent, which was above the historic average. Yet, the growth rate has been range bound from 6.4 to 6.9 percent since December 2017. The annual rate rate of growth has been within that same range since May 2017, staying between 6.8 and 6.9 percent since November 2017.

Real consumer durable goods spending in June 2018 was $1,672 billion real dollars (seasonally adjusted at an annual rate), which was an all-time high. Low interest rates have helped boost durable goods spending as a percent of total consumer spending, but with the 10-year Treasury rate rising year over year, there may be further deceleration in the rate of growth in durable goods consumer spending ahead.

Below are key spending categories that lead the most important manufacturing new orders and production indices.

Accelerating Growth: air transportation services, clothing/footwear, electronics, food/beverage, medical care, other non-durable goods

Decelerating Growth: appliances, durable goods, motor vehicles/parts, pleasure boats, total consumer 

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