In March, real consumer durable goods dropped to its lowest level since February 2017. The month-over-month rate of contraction for durable goods spending was -11.2%, which was the fastest rate of contraction since April 2009. 

The annual rate of growth decelerated for the first time since August 2019, decelerating to the slowest rate of growth since November 2019. However, the real 10-year Treasury rate is falling at its fastest year-over-year rate since late 2012. The question is will lower interest rates be enough to overcome lower incomes?

Below are key spending categories that lead the most important manufacturing new orders and production indices. Note that all spending categories but appliances moved to accelerating growth. Further, appliances were very close to shifting to accelerating growth.

Accelerating Growth: appliances, electronics, food/beverage, other non-durable goods

Decelerating Growth: clothing/footwear, durable goods, medical care, motor vehicles/parts, pleasure boats, total consumer

Accelerating Contraction: air transportation services

Decelerating Contraction: