Although they are large consumer purchases, these sales are not accurately tracked by the widely watched survey on household expenditures conducted by the Management and Coordination Agency. If they are out of sync with other consumer expenditures, conclusions on the basis of the household survey can be misleading. Precisely this problem occurred in the first quarter. The unexpected January-March 1.2 percent quarterly jump in consumer spending, the biggest single contributor to GDP, is somewhat less surprising if both the household survey and the automotive registrations are considered. In the April-June period, registrations declined 0.1 percent or so, suggesting that this source of aggregate demand did not build on its earlier gains.
Imports are an alternative early indicator of consumer spending trends.
They painted a picture similar to that presented by vehicle registrations in the first quarter but were at variance in the spring. Capital spending, also a major component of GDP, presents a more dramatic picture of slippage from first-quarter highs. This measure rose 1.3 percent in the January-March period, reversing the sharp declines of the two previous quarters. As such, the 2.3 percent annualized rise in capital spending in the first three months of 1999 should not have been a great surprise. If machinery orders remain an accurate predictor, then the short term does not look favorable.