It seems the real economy doesn’t want to cooperate with interest rates at record lows, record-high government debt levels, and the fattest Fed balance sheet on record.

For November and December of 2011 and January of 2012, inflation-adjusted consumer spending was flat when compared to 2010 (source: U.S. Commerce Department). Let’s keep in mind that November and December represent the busiest consumer spending shopping season because of the holidays.

Our research says that consumer spending was flat because real disposable personal income was flat. For January, inflation-adjusted real disposable personal income actually fell 0.1% (source: Commerce Department).

Real disposable personal income has fallen two of the last three months. Year-over-year, real disposable income was up a mere 0.6%.

 Since consumers’ current disposable incomes couldn’t keep up with inflation in January, this means that consumers needed to dip into their savings in January just to maintain their standard of living. (See: Consumer Debt Growing Again: This Time Not By Choice.)

We can see it in the numbers…

For January 2012, the consumer savings rate fell to 4.6% from 4.7% (source: U.S. Commerce Department):

 We continue to ask the same question around here: how can gross domestic product (GDP) and economic growth resume here in the U.S. when consumer spending is 70% of GDP and real disposable personal income is falling?

 Compound this with the fact that, for the month of February, oil prices were up over 10%! This does not bode well for February’s consumer spending and real disposable personal income numbers—never mind economic growth.

 For February, manufacturing in the U.S. slowed 1.7% from January’s level, as reported by the Institute of Supply Management’s factory index, which is the most broad-based manufacturing index in the U.S. Lower U.S. consumer spending didn’t help.

 Most disturbing in the report: “new orders” for good, which are reflective of future economic growth because they keep track of customer orders that will be delivered in the future, fell 2.7% from January’s reading.

 More proof, dear reader, of no economic growth and a bear market trap.

 Where the Market Stands; Where it’s Headed:

 This morning, China’s government cut its economic growth for 2012 to 7.5%—the lowest level of economic growth for the country in eight years. The news resulted in a pull-back for stock market futures.

 Dear reader, I keep singing the same tune: there will be no economic growth in the U.S. this year. The stock market rally we have enjoyed since March 2009 is a sucker’s rally with the purpose of bringing investors back into the stock market before stock prices decline again. This opinion stands.

 What He Said:

“You’ve been reading my articles over the past few months and have seen how negative I’ve become on the U.S. economy. Particularly, I believe it’s the ramifications of the faltering housing sector that are being underestimated by economists. A recession doesn’t take much to happen. It’s disappointing that more hasn’t been written on the popular financial sites and in the newspapers about the real threat of a recession happening in 2007. I want my readers to be fully aware of my economic opinion: I wouldn’t be surprised to see the U.S. economy in a recession sometime in 2007. In fact, I expect it.” Michael Lombardi in PROFIT CONFIDENTIAL, November 13, 2006. Michael was one of the first to predict a U.S. recession, long before Wall Street analysts and economists even thought it a possibility.