Aug 30, 2011
Don't Believe the Doom & Gloom
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.