US income and spending growth peaked in 2011, will lead to recession

Editor's note: this post has been updated to reflect corrections to an error in the database used to calculate personal income and personal consumption expenditures for the 2011-12 time period. Originally, these numbers were flat. However, the correction shows a nominal increase in the range of 3 to 4%. We apologise for the error.

Just to put some meat on the bones around the cyclical downturn turning into recession, the personal income data paints a negative picture absent debt accumulation. Originally, the data were much worse than I anticipated but this was due to an error in the spreadsheets that I was using. Now I can see that the data are more benign and that recession is not imminent as ECRI says, but the data are building in that direction.

What we see in recessions is that ...


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