Thursday, August 22, 2013

Consumers Are Spending More on Durable Goods This Recovery

The chart above from the St. Louis Federal Reserve shows non-durable (in blue) and durable goods (in red) purchases, with 2007 being base 100.  While durable goods dropped more sharply during the recession (as would be expected), their purchases have clearly increased at a sharper rate during the recover.  Non-durable purchase, in contrast, are rising at a far slower rate.

Let's take the consumer purchasing numbers and compare them to overall consumer industrial production.  We see a sharp drop in consumer goods IP during the recession followed by a moderate increase. 

The above spending pattern leads to a large increase in the production of durable goods (blue line) than non-durable goods (red line).