Quote from PhiSigmaIota:
Incomes are not going higher, thet are falling..
I do not know the exact timing for the housing crash(may be after FED raises 50bps more), but when it happens it will be very messy.
Everything goes back to fundemantals..
U.S. January Spending Unchanged; Incomes Fall 2.3% (Update1)
Feb. 28 (Bloomberg) -- U.S. personal spending was unchanged in January after rising a month earlier as people bought fewer automobiles, a government report showed. A gauge of prices rose.
The $8.473 trillion in January spending followed a 0.8 percent rise, the most since July, in December to $8.477 trillion, the Commerce Department reported today in Washington. Incomes fell 2.3 percent after a record 3.7 percent gain that reflected a one-time $32.6 billion dividend payout from Microsoft Corp.
Sales of new vehicles declined in January from a month earlier as automakers reduced discounts. Employment that has rebounded above pre-recession levels will fuel spending on other consumer goods, helping lift first-quarter economic growth, economists said. Wages and salaries rose 0.6 percent, the most since July, after rising 0.5 percent.
``Even though the consumer paused in January, we think we'll see a rebound in February,'' said Michael Englund, chief economist at Action Economics LLC in Boulder, Colorado. Englund correctly forecast January spending. ``Higher prices had a very real effect'' on vehicle sales. ``People pulled back because of higher prices.''
Economists forecast spending to rise 0.1 percent after a previously reported 0.8 percent December increase, according to the median of 56 estimates in a Bloomberg News survey. Incomes were forecast to fall 2.6 percent following a 3.7 percent increase.
Prices of goods and services bought by consumers rose 0.2 percent last month after no change. They rose 2.2 percent from January of last year compared with a 2.4 percent year-over-year rise in December.
Prices
The report's gauge of prices tied to spending, excluding volatile food and energy prices, rose 0.3 percent after no change. The gauge is tracked by Fed Chairman Alan Greenspan and other policy makers.
Consumer purchases fell 0.2 percent after a 0.9 percent rise when adjusted for changes in prices, the government reported.
Spending on durable goods such as autos, furniture, and other long-lasting items, adjusted for inflation fell 4.7 percent after rising 4.4 percent.
Purchases of non-durable goods rose 0.8 percent after rising 0.4 percent. Spending on services, which account for almost 60 percent of all purchases, rose 0.2 percent after increasing 0.4 percent.
Disposable income, or the money left over after taxes, fell 2.6 percent in January following a rise of 4.1 percent the previous month.
Savings Rate
The personal savings rate fell to 1 percent last month, compared with 3.6 percent in December. The indicator weighs current income from wages, salaries, dividends, businesses and government payments against spending. It doesn't account for borrowed money, income from investments, or withdrawals from prior savings.
Consumer spending rose at a 4.2 percent annual rate in the fourth quarter after a 5.1 percent gain the previous three months, the latest Commerce Department data showed. The gains are the strongest back-to-back since the six months ended in March 2000.
Cars and light trucks sold at an annual rate of 16.2 million last month, down 12 percent from 18.4 million in December that was the highest since October 2001, industry figures showed. General Motors Corp., the world's largest automaker, earlier this month added rebates of as much as $1,000 on its newest models to help spur sales.
