Income Growth Finally Hits Average Rate

It took almost three years, but real disposable income growth finally reached its long-term average rate of 3.1 percent.

In June 2018, real disposable income was $15,520 billion. As is normally the case, real disposable income set an all-time high this month, up 3.1 percent from one year ago. This was the fastest rate of growth since October 2015, and it was the first time since the same month that the month-over-month growth rate climbed to its long-term average. 

The annual rate of growth remained unchanged at 2.8, as it has since February. This was the fastest rate of annual growth since May 2016, which is unusually flat. Regardless, the growth in real disposable income is still a positive sign for durable goods manufacturing.

Keep in mind that changes in real disposable income typically lead capital equipment consumption by almost 24 months.

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