Thursday, 4 October 2012

Chart(s) of the Day II: U.S. Personal Consumption Expenditures & Industrial Production of Consumer Goods

As a follow up to the article, Chart of the Day: U.S. Personal Savings Rate, published earlier today, here are some charts for personal consumption expenditures and industrial production of consumer goods in the U.S.

The first three charts below clearly demonstrate that consumer spending is not low at all and hence can't be blamed for the U.S. economy not growing quickly enough (many argue to the contrary that consumer spending is too high, see for example almost any interview with Peter Schiff). As a matter of fact, the real personal consumption expenditures hit its highest level ever in August 2012 at USD 9,620.50 billion. This was up 2.04% on August last year and was USD 292.70 billion (3.1%) higher than the USD 9,327.80 billion expenditures reported for December 2007 (the peak figure reported prior to the financial crisis).

 
 
 
But here is a section of the U.S. economy that can be improved and probably deserves a lot more attention than consumer spending, namely the production of consumer goods. The index value (in nominal terms) as of August 2012 of 92.72 is 6.01% lower than reported in December 2007 and even lower than that reported 10 years ago, when the index stood at 94.37.
 
 

Conclusion: consumer spending in the U.S. is not low and it not being higher is therefore not really a problem for the economy, but the low production figures of consumer goods certainly are.
 
 

 

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