PCE and Mew

I'm a chart person. And this one is interesting:

(Click to enlarge)



First, a few definitions. PCE (the blue line) = Personal Consumption Expenditures, aka Chucky, aka consumer spending. MEW (the red line) = Mortgage Equity Withdrawal aka the home ATM.

What really surprises me is that despite heavy heavy withdrawals of cash from home equities, consumer spending wasn't much higher! You'd think with all that cash withdrawal, the PCE number would have gone up more dramatically. Is this simply a function of baby boomers retiring early and using reverse mortgages?

The economy is completely and totally being floated by consumers and their spending. You have to wonder that, without the Home ATM, would we be in a very serious recession already, and are we headed for one now that the Home ATM is drying up? And if it is boomers draining their house savings, what do they do when it dries up? Like most economic matters, more questions than answers.