Volatility of the Components of Consumption Spending

Every now and then I create a chart that shows so incredibly clearly what we expect to see that I go back and make sure I didn't do something wrong.  This is one of those times.

I decided to look at the volatility of the three main components of consumption spending (real spending on consumer durable goods, real spending on consumer non-durable goods, and real spending on consumer services).  My measure of volatility is the absolute value of the month-to-month percentage changes in spending.  The data (from FRED) are for January 1959 to April 2014.  And this is the chart:

(Click to enlarge.)

Red is consumer durable goods, yellow is consumer non-durable goods, and green is consumer services.  And I found the results almost too good to be true, so I checked them several times.  Yep.

And the descriptive statistics go right along with it.  Durable goods spending is roughly three times as volatile as non-durable goods spending, and almost six times as volatile as spending on services.  Not only that, but the variation in changes in durable goods spending (as measured by the coefficient of variation) is also larger.

Spending Component	Mean of Monthly Percentage Changes	Standard Deviation of Monthly Percentage Changes	Coefficient of Variation of Monthly Percentage Changes
Real Consumer Durable Goods Real Consumer Non-Durable Goods Real Consumer Services	1.98% 0.60% 0.34%	1.85% 0.50% 0.23%	0.95 0.84 0.70

 Another interesting bit of data is that the price index for consumer durable goods follow a remarkably different time path than do the price indexes for non-durable or services, as the following chart reveals.

(Click to enlarge.)