The growth in consumption again outpaced income, producing another quarter of very strong GDP growth. The overall rate of GDP growth in the first quarter was 4.5 percent. This is down from the 6.0 percent rate in the previous quarter, but still quite rapid for this stage in a business cycle. Consumption spending, measured in 1992 dollars, grew at a 6.7 percent rate, and now stands 5.5 percent above its level a year ago.
Consumption continues to far outpace income growth.
Consumers are clearly both spending based on their capital gains in the stock market and adding to their debt burdens. The debt burden measured as a share of disposable income is already at a record level, more than 5.0 percentage points above the previous peak of 19.3 percent reached in 1990. Also, many new cars are now leased rather than purchased with loans. If these lease payments were factored in, the implicit debt burden would be at least two percentage points higher. While investment in computers fell at a 3.2 percent annual rate, in 1992 dollars it rose at a 26.7 percent annual rate.