Real Consumption Growth Rate: Highest Since 2007

The chart above shows the annual percent change from the same month in the previous year for real personal consumption expenditures (data here) from January 1970 through December 2009, as reported in today's Personal Income report from the BEA. December was the third consecutive month of a positive growth rate for real personal consumption, and the growth has been positive in four out of the last five months.

Further, the 1.77% growth rate in December was the largest monthly increase in real consumption since November 2007, the month before the recession officially started. Add this to the growing list of V-signs of economic recovery, and notice how it's similar to the V-patterns of recovery following recessions in 1975, 1980, 1982 and 1991.

See Scott Grannis for more analysis on why this growth in real consumption is a positive indicator, and one that suggests that job growth will follow.