If there is one data point that Charles Biderman, of TrimTabs, relies upon, it is the series of salary and wage growth (or real-time tax with-holdings) that his firm keeps an extra special eye on. Critically, in our opinion, he notes the very recent shift from positive growth in income growth (after inflation) to negative for the first time since Q1 2010. The picture is particularly worrying since he notes that this is right before the all important holiday sales period which he suspects will significantly disappoint (as we are already seeing in data post Black Friday). Of course, we have long held that the decoupling of the US with Europe (and Asia for that matter) is more a lag than a simple decoupling, and given Biderman's insight on income growth (after inflation) we tend to agree with the Bay Area brain-box that the slowing economic outlook of Q1 2012 will herald the FOMC's push to QE3. Also noteworthy is that the last time they enacted LSAP (QE2) saw the peak in income growth (after inflation) and so their hope that this printing of money will juice a pre-election-cycle economy and while Obama may hope this brings him back from the edge, we suspect, like Charles, that it will not be enough.
Income and Salary growth, as betrayed by TrimTabs YoY growth in tax with-holdings, shows a decline after inflation for the first time since Q1 2010 - with the peak right after QE2.