In March, real consumer durable goods spending was $2,314,045 (millions of $, SAAR), which was an all-time high. Compared with one year ago, durable goods spending increased 44.0%, which was the fastest rate of month-over-month growth ever and the only month ever with growth faster than 24%. Of course, this incredible rate of growth was partially a result of an easy comparison with March 2020 due to the start of the economic lockdown.

In nine of the last 10 months, month-over-month growth was more than 11%. The only exception was December when the growth rate was still almost 9%, nearly double the historic average. The annual rate of growth accelerated for the ninth straight month to 12.2%, which was the fastest rate of annual growth since April 2000. Also, the annual rate of growth was more than double the historic average.

While durable goods spending grew at an accelerating rate since the economic lockdowns started, total consumer spending contracted, although at a slower rate than in February. Durable goods spending accounted for more than 17% of total consumer spending, which was its highest share of total consumer spending ever and the third month in a row with a share greater than 16%. Multi-decade trends show that durable goods spending steadily increased its share of total consumer spending while services decreased its shares. While the workforce may be trending toward a service economy, consumer spending is trending toward a manufacturing economy.

In March, the nominal 10-year Treasury rate was 1.61%, which was the eighth month in a row that the nominal rate increased. Also, this was the highest rate for the 10-year Treasury since January 2020. Of course, historically, the current rate is extremely low. 

While the nominal 10-year Treasury rate was rising, the real 10-year Treasury rate was falling to its lowest rate since November 2011. The reason for this was that the rate of inflation increased to 2.62% in March, which was the highest rate of inflation since August 2018. As the real 10-year Treasury rate is the nominal rate minus the inflation rate, the real 10-year Treasury rate was -1.01% in March.

After two months in positive territory, the year-over-year change in the real 10-year Treasury rate fell back below 0 to -0.34%. Therefore, the change was negative for 18 of the last 20 months.

Below are key spending categories that lead the most important manufacturing new orders and production indices. 

Accelerating Growth: appliances, durable goods, electronics, motor vehicles/parts, pleasure boats

Decelerating Growth: food/beverage, other non-durable goods

Accelerating Contraction: air transportation services, total consumer

Decelerating Contraction: clothing/footwear, medical care