The numbers say no, even if the market says otherwise

4.9-per-cent annual rate over the past three months. The maligned wage and salary component, the income that people tend to spend, rose 0.5 per cent month over month and is up five per cent on the nose over the past three months. That is solid.

After-tax disposable income also rose 0.4 per cent month over month and the threemonth pace is running at a five-per-cent annualized rate as well; in real terms, disposable earnings are up at a 3.7-per-cent annual rate. That is more than just decent.

As for spending, let’s again look at what has happened between May and August — a period of negative foreign news and a slippery stock market.

Real consumer spending managed to rise at a 3.3-percent annual rate. Durable goods, which is the deep cyclical component, has surged at a 5.9-per-cent pace. Non-durables are up 5.1 per cent and services, which consist mostly of essentials, have risen 2.3 per cent. These are all in volume terms.

Discretionary consumer spending has expanded at a 3.8-per-cent annualized pace from May to August, while nondiscretionary spending (essentially staples such as health care, rent and groceries) has risen at a lesser 2.1-per-cent annual rate.

The ratio of discretionary to non-discretionary spending is flirting with near record highs and belies the notion that the American consumer is supposed to roll over and play dead just because of escalating problems in China and the other and yet this never did presage a booming economy. This recovery still goes down as the weakest of all time, even with a boom in equities.

The bottom line is that Main Street has for so much of this cycle been grappling with job loss, no income growth, deleveraging moves towards balance-sheet repair, stringent mortgage credit guidelines and yet Mr. Market was in a quantitative-easing-led multiple-driven party mood.

Maybe the tables have turned and it is Main Street’s turn to party. Wall Street can choose to join if it wants, but for now it is too busy gazing at the darker side of lower oil prices and a Chinese economy weaning itself off industrialization and moving toward services.

The main message is that Main Street loves deflationary growth because of the positive implications for real consumer spending, but perhaps what this means for corporate profits is another matter altogether.

But no matter: Just as the U.S. economy can survive the problems abroad, Main Street can probably live without Wall Street, considering how long Wall Street managed to successfully ignore Main Street for most of this cycle.

In the final analysis, and with all deference to the truly mythical trickle-down wealth effect, the causation runs this way: It is the economy that ultimately drives the stock market, not the other way around.

Just remember, the stock market has correctly predicted all seven recessions since 1960 — but it had some help in a Fed-induced inversion of the yield curve.

At the same time, the stock market has corrected 10 per cent or more no fewer than 13 times in the past five decades and failed miserably at calling for the downturn. The reason: The curve didn’t invert.

As hard as the 10-year U.S. treasury note has been rallying and as much as the market is repricing the Fed, the spread between the yields on the 10-year T-note and the three-month T-bill is 200 basis points — and 140 basis points for the spread the between the two- and 10-year treasury yields.

The stock market has indeed predicted seven of the past 20 recessions, but this time will very likely make it seven out of 21.