The balance between income and spending across the US consumer sector is growing increasingly unbalanced, and reliance on credit will certainly give away quickly should employment and wages not turn positive. According to Commerce Department statistics, personal spending rose a greater than expected 0.6 percent through June. This extends the positive trend for a 21st consecutive month of expansion. However, in contrast to the boost in spending, income growth actually cooled through the same period. Total income ticked 0.1 percent higher, but disposable income (a truer measure of consumption) actually dropped 1.9 percent through June after the government’s tax rebate was spent. With gasoline prices holding well above $4.00 a gallon in many areas across the US, home equity being steadily sapped by the residential recession and unemployment building for seven consecutive months, there is little potential probability for consumers to remain on their breakneck spending pace for much longer. Another interesting component of this data was the inflation component. The PCE consumer inflation reading rose at its fastest pace since 1981 - confirming (or perhaps more effectively hitting home on the urgency of price growth) what the CPI and PPI numbers have been reporting. Such conditions merely reiterate the difficult position the Fed is in with deciding monetar policy; and that tomorrow’s meeting will likely involve heated debate.