Durable Goods Spending Hits Fastest Growth Since August 2018

Month-over-month, July consumer durable goods spending grew 5.7%, just above the historical average.

In July, the month-over-month rate of growth for durable goods spending was 5.7%, which was the fastest rate of growth and the first month with growth above the historic average rate since August 2018. Additionally, it was the fifth month in a row with growth faster than 4.0%. The moderate boost in the rate of growth was likely the result of the falling change in the real 10-year Treasury rate. Because the 10-year rate itself has dropped so low, durable goods spending is making up its largest share of all consumer spending ever. 

As a result, the annual rate of growth held steady at 4.4%. This was the slowest annual rate of growth since April 2012, but if the 10-year Treasury rate remains low, there could be some modest acceleration in the annual rate of growth heading into the fourth quarter.

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

Accelerating Growth: electronics, other non-durable goods

Decelerating Growth: air transportation services, clothing/footwear, durable goods, food/beverage, medical care, motor vehicles/parts, total consumer

Accelerating Contraction: 

Decelerating Contraction: appliances, pleasure boats

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