By contrast, total real private domestic final purchases (PDFP) – which includes household spending, business fixed investment, and residential investment, and currently represents about 85 percent of aggregate spending – has increased at an annual rate of 3 percent this year, significantly faster than real GDP. Household spending growth has been particularly solid in 2015, with purchases of new motor vehicles especially strong.
Job growth has bolstered household income, and lower energy prices have left consumers with more to spend on other goods and services. Increases in home values and stock market prices in recent years, along with reductions in debt, have pushed up the net worth of households, which also supports consumer spending.