With the robust initial estimate of Q3 GDP growth (3 percent) and a strong employment report (+261K jobs) we have more indications of a strong economy. While I think most of the evidence does point in that direction, I am concerned about consumption patterns.
Personal consumption expenditures have been increasing at a steady rate, however the composition of those expenditures is surprising. Durable goods just do not appear to be returning to pre-crisis levels:
It is possible that this is part of a more general trend of decreasing reliance on durable goods, but the drop-off in the 2000's seems quite rapid. If the broad trend of decreasing significance of durable goods in our consumption bundle describes a change in the structure of the economy, that change may be accelerating. If however, the structure is more or less stable, then we have a long way to go before the economy gets back to normal.