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Earlier in the day, the income and spending report was released. For the most part, on a long-term basis it is looking better, but we have to question the most recent month-over-month down tick. Is it a sign that the deflation spiral is starting to affect income? Or is this just a bump in the road?

We know that the latest GDP report was propped up by the consumer spending component. Making up over 70% of the GDP, we need to take notice of what the trend is showing. Already there is a surge in the inventory to sales ratio that tells us that while manufacturing may be forging ahead, sales may be slowing.

Source: Income and Spending Downturn: Bump in the Road or a Crater?