Personal income is dropping to pre-recession level

Q4 personal income dropped very nearly to zero. Consumers -in typical fashion- kept spending though. Based on the data since WWII, the U.S. economy is probably going to fall into recession at some point in Q2.  Many of you will be familiar with the Chicago Fed CFNAI data I post every month. That data suggests the economy experienced a 1-quarter contraction in Q2 2012, and again Q2 in 2013. Yes, the BEA rejects that view (for now). The Chicago CFNAI suggests the economy grew in Q3-Q4, but is not far from contracting again (see last week’s letter for the latest on this).

Much more in the Greedometer Newsletter.