Photo: AFP/Frederic J Brown

Pending home sales in the US have been negative year-on-year for the past seven months. Shown below is year-on-year change in the gauge as well as the six month average of YOY changes. Home prices are still rising, but at a slower pace. Auto sales also are slightly softer.

US consumers are buying a lot, but they are buying less of the two items on which households spend the most money, namely houses and cars.

Consumer spending is robust, but highly dependent on revolving credit (retail sales and US credit card debt outstanding have moved together tick for tick during the past six months). Given that year-on-year growth of average real hourly wages is now negative, it’s not surprising that the household sector is showing signs of exhaustion in selective areas.