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Durable Goods Spending Growth Slowed Significantly in July
Growth in durable goods spending slowed as a result of contracting disposable income, a slight increase in the year-over-year change in the 10-year Treasury rate and fading consumer confidence. However, the most significant reason was dramatically slower growth in motor vehicle and parts spending.
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In July, real consumer durable goods spending was $2,186,811 (millions of $, SAAR), which was the lowest level of spending since February. July’s durable goods spending was 8.5% higher than it was one year ago, which was the first month without double-digit growth since May 2020.
The annual rate of growth decelerated in July, ending a streak of 12 months of accelerating growth. However, the rate of annual growth was still 22.0%, which remained very near the all-time fastest rate of growth. This extreme rate of growth is causing significant problems in the supply chain as it is contributing to increased prices of raw materials, shipping problems, and production problems as some manufacturers are still dealing with supply chain disruptions and reduced staffing.
Below are key spending categories that lead the most important manufacturing new orders and production indices.
Accelerating Growth: clothing/footwear, medical care, total consumer
Decelerating Growth: appliances, durable goods, electronics, food/beverage, motor vehicles/parts, other non-durable goods, pleasure boats
Accelerating Contraction:
Decelerating Contraction: air transportation services
