Monday, August 29, 2011

Real Consumer Spending Up in July to Record High

The BEA reported today that real consumer spending increased in July to $9.428 trillion (2005 dollars), setting a new monthly record (see chart above).  Consumer spending in July increased by 0.46% from June, and by 2.3% from a year ago.  That was the highest monthly increase in consumer spending since December 2009, 19 months ago.  By major product type, the largest increase in July was the 2% jump in spending by consumers on durable goods.

In comparison to the cyclical peak in December 2007 when the recession started, real consumer spending in July was 1.1% and $100.4 billion above that pre-recession level.  Despite low readings for consumer confidence based on survey data, the spending data tell a different story: consumer spending is coming back strong to new record levels almost every month.    

9 Comments:

At 8/29/2011 9:32 AM, Blogger morganovich said...

PCE up 0.8% and PCI up 0.3% sounds like financial stress to me.

would be interesting to see the 2 series overlaid.

are savings rates back in a downtrend?

 
At 8/29/2011 9:47 AM, Blogger Methinks said...

So, no lack of "aggregate demand" then, eh?

 
At 8/29/2011 9:47 AM, Blogger realsimon said...

Do you think inflation expectations have anything to do with it?

 
At 8/29/2011 10:29 AM, Blogger morganovich said...

realsimon-

it's possible, though i suspect that using too low a deflator to generate the real numbers actually has more to do with it.

 
At 8/29/2011 10:46 AM, Blogger morganovich said...

http://cr4re.com/charts/charts.html?Manufacturing#category=Manufacturing&chart=ISMFedAug2011.jpg

nice chart of all the regional fed manufacturing indexes through august.

makes it look like we are in for a bad ISM number when it comes out.

 
At 8/29/2011 11:05 AM, Blogger Rufus II said...

I'd be a little cautious, still. I don't normally follow the Goldman Sachs Weekly Retail Spending Report, but I noticed the last two have been Down 1.5 and 1.0%, respectively. August might not follow through as well as July.

 
At 8/29/2011 5:11 PM, Blogger tef said...

If the consumer is spending like gangbusters, why is unemployment so high?

I wonder what this graph would look like if also adjusted for population growth? Not too good.

 
At 8/29/2011 7:36 PM, Blogger juandos said...

From the folks at Zer0Hedge: Since 1948, every time the four-quarter change has fallen below 2 percent, the economy has entered a recession...

Just saying is all...

 
At 8/30/2011 10:37 AM, Blogger Unknown said...

"Everyman" here . . . is this only a measure of how much money went from Point A to Point B? If so, is there a way to see how many "widgets" were purchased? I can use a ton of gas in first gear but still won't go very far very fast . . . Thanks for playing.

 

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