Real Consumption Growth Highest Since 2007
From Table 10 in today's BEA report on Personal Income and Outlays, the graph above shows the percent change from a year earlier in Real Personal Consumption Expenditures, monthly from December 2006 to June 2010. Most of the news reporting focuses more on month-to-month changes, with the resulting "gloom and doom" headlines like "Flat consumer spending adds to recovery worries," with commentary like "Consumer spending and incomes were unexpectedly flat in June implying an anemic economic recovery for the remainder of this year."
Looking at real consumer spending over a longer period of time like a year, the picture is not quite so gloomy. The graph above shows that consumer spending (percent change from a year earlier) slowed consistently through 2007 and 2008, reached a bottom in the spring of 2009, and has been improving consistently since last summer, when the recession most likely ended. The growth in real consumer spending has been positive for the last seven months on an annual basis, and reached a 31-month high in June of 1.7%, the highest growth rate in real consumer spending since November 2007.