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could support a rise in consumption of 1.7 percent of disposable income, or
more than enough to offset the rise in taxes in 2013.
Looking ahead, consumer spending in 2014 is likely to grow faster
than its 2-percent rate during the past three years. The rise in wealth and
the progress in deleveraging have created a more-stable platform on which
to base the growth of consumer spending. The rapid growth of consumer
durables during 2013 (5.6 percent) is likely to continue or increase further.
The average age of light motor vehicles on the road has risen to 11.4 years
and it appears likely that some pent-up demand remains for motor vehicles
and other durables whose purchases have been delayed during the recession
and the slow recovery.
Business Investment
Business Fixed Investment. Real business fixed investment grew
moderately, 3.0 percent during the four quarters of 2013, down from a 5.0
percent increase during 2012. The slower pace of business investment during
2013 was concentrated in structures and equipment investment, while
investment in intellectual property products grew faster in 2013 than the
year earlier. Investment in nonresidential structures declined 0.2 percent following
robust growth of 9.2 percent during 2012. Investment in equipment
slowed to 3.8 percent, following a 4.5 percent increase in 2012. In contrast,
investment in intellectual property products picked up to 4.0 percent during
2013 from 2.9 percent in 2012. (In July 2013, as part of a comprehensive revision
to the National Income and Product Accounts, the Bureau of Economic
Analysis revised its classifications for business fixed investment to include
1) Research and Development and 2) Entertainment, Literary, and Artistic
originals in a new category of Intellectual Property Products, which also
includes software investment. See Box 2-1 on the July 2013 benchmark of
the National Income and Product Accounts.)
Within equipment investment, major components such as information
processing equipment and transportation equipment posted less robust
growth in 2013 than in 2012, offsetting stronger growth in industrial equipment
investment. Within investment in information processing equipment,
declines were posted in investment in computers and photocopy equipment.
Within transportation equipment, growth was not as fast as 2012 for investment
in autos, aircraft, and ships.
Real investment in nonresidential structures edged down 0.2 percent
during the four quarters of 2013, down from growth of 9.3 percent in 2012.
Solid growth in petroleum and natural gas drilling was offset by declines in
the construction of manufacturing structures and power and communication
facilities.
The Year In Review And The Years Ahead | 59