Durable Goods Spending Reacts to Changing Treasury Rate

In September and October, durable goods consumer spending growth slowed between the historic average of 5.5 percent for the first time since August 2017.

In October, the month-over-month rate of growth for durable goods spending was 4.1 percent, which was the second month in a row that the growth rate was below the historic average of 5.5 percent. October’s rate of growth was the slowest since April 2016. The annual rate rate of growth was 6.4 percent, decelerating for the second straight month. This was the slowest rate of growth since April 2017. 

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, further deceleration in the rate of growth is ahead. Additionally, real disposable income has just started to grow slower, which will further contribute to slowing growth in durable goods spending. 

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, other non-durable goods, total consumer

Decelerating Growth: appliances, durable goods, medical care, motor vehicles/parts, pleasure boats 

Reports

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