The moderate second-quarter growth rate was in line with the consensus of economists participating in the Blue Chip survey . Real personal consumption expenditures were flat in the second quarter. Strong advances in services spending offset sharp declines in purchases of motor vehicles and nondurables. Labor disputes that limited supplies of popular vehicles may have affected car sales. Real disposable personal income growth was healthy in the second quarter, the employment situation stayed strong in July, and consumer sentiment remains upbeat.
Consumers continue to devote a growing share of their total spending to durables .
The relative gain in durables has come at the expense of nondurable goods sales. Service's share of total consumer spending has also grown. Industrial production continued to post strong gains in June, led by high-tech durables and commercial aircraft. Production of motor vehicles and parts also advanced in June, but was off sharply for the quarter. Since 1995, U.S. GDI has exceeded GDP , leading some to speculate that the Commerce Department may be underestimating output.