ECRI: What Wealth Effect?

Thanks to Will for passing this along.

Despite surging prices for homes and equities, consumer spending is contracting, registering its biggest monthly decline since September 2009. Quite simply, the wealth effect is rendered moot by languishing incomes.

No wonder yoy U.S. import growth has also plunged into negative territory, whether or not oil imports are included. In recent decades, this has happened only during U.S. recessions. Notably, unlike data for GDP and jobs, imports data are not revised substantially, long after the fact.

Some are surprised that inflation has failed to take off despite massive amounts of quantitative easing. The 

explanation is simple: recession kills inflation.