… Here’s why 1Q14 could stink to high heaven (HT Zero Hedge, which claims, with graphs, that the one-month year-over-year plunge in disposable income in December is the worst in 40 years; source: BEA’s “Personal Income and Outlays” released today at Table 10):
Also note shocking decay in the differential between income and spending, going from -0.1% in August to -1.8% in November to -5.2% in December. Over 5 cents of every dollar in spending came from savings or increased borrowing.
Clearly (because the savings rate is already low), the only reason Christmas shopping season surprised by coming in nearly acceptable is because people raided money they’ve saved and spent money they didn’t have.
That’s not sustainable.