Americans may soon start buying more cars, appliances and other items because the ones they own are the oldest in almost half a century, according to Neil Dutta, Renaissance Macro Research LLC’s head of U.S. economics.
The CHART OF THE DAY displays the average age of so-called consumer durable goods, as compiled by the Commerce Department since 1925. Dutta referred to the annual figures in a note to clients yesterday.
Last year, the average climbed to 4.6 years, the highest since 1962. The increase from 4.5 years was the fourth in a row, the longest streak since the Great Depression.
“Consumers are increasingly likely to commit to big-ticket purchases” as their finances improve, wrote Dutta, who is based in New York.
Household debt fell to 81.5 percent of gross domestic product as of Sept. 30 from 97.5 percent at the end of June 2009, when the most recent recession ended, according to the Federal Reserve. Disposable income rose 12 percent during the same period, based on Commerce Department data.
Increased spending on durable goods is one reason why U.S. economic growth is poised to accelerate, the report said. Dutta also cited a rebound in housing and the potential for growth in business investment.
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