In other words, it is the household's relative income that determines its consumption spending.

This consumption spending must represent the floor below which the level of income cannot realistically be expected to fall.

That would finally squeeze the housing market and perhaps cause a slowdown in consumption spending.

The charts below show how much of each $1,000 in personal consumption spending goes for various things.

Personal consumption spending will almost certainly show an improvement, but analysts cautioned about reading too much into the figures.

To be sure, some economists like the rental gauge, saying it measures consumption spending.

"Personal consumption spending will probably be down by 1 percent or so in the fourth quarter," he said.

If then security prices level off, our total consumption spending and therefore our total national income will go down.

Furthermore, lower asset prices have negative wealth effects for consumers, which further reduce consumption spending.

Personal consumption spending was recalculated at a 5.8 percent rate, up from 5.7 percent a month ago.