Whaddaya know:

Personal incomes plunged in July while consumer spending slowed significantly as the impact of billions of dollars in government rebate checks began to wane.

The Commerce Department reported Friday that personal incomes fell by 0.7 percent in July, the biggest drop in nearly three years and a far larger decline than the 0.1 percent decrease analysts expected.

That "impact" was a dead cat bounce.

A gauge of inflation closely watched by the Federal Reserve remained elevated in July, rising by 0.6 percent. Over the past 12 months, this inflation gauge tied to consumer spending was up 4.5 percent, the biggest year-over-year increase in more than 17 years.

The surge reflected the big increases that have occurred this year in food and energy costs. Excluding food and energy, inflation by this measure was up 0.3 percent in July, and 2.4 percent over the past 12 months, still above the Fed's comfort zone. The central bank is caught in a bind between a sluggish economy and rising inflation pressures.

It's called stagflation. Nice to be going into a down cycle with trillions looted and a banking system on the verge of collapse.

Well done, all.