Nov. 29 (Bloomberg) -- I wrote in this column in early 2002 that Time magazine erred in not naming U.S. consumers ``Person of the Year,'' in recognition of their impressive purchases of cars and houses in the 2001 recession.

The U.S. consumer has stayed remarkably resilient, even in the face of a recovery with declining family income. Now, however, many forecasters see them as they would Butch Cassidy and the Sundance Kid trying to escape from the Bolivian army: you may have a good run, but the forces you are about to face are overwhelming.

Richard Berner of Morgan Stanley called the combination of a softening job market, higher oil and food prices, rising mortgage costs, tighter lending standards, and falling home prices, a ``perfect storm'' for consumers.

And yet, the consumer is still firing away. Consumption rose 3 percent in the third quarter, adding 2.1 percent to the 3.9 percent increase in gross domestic product. And just days ago, consumers again beat expectations, delivering $10.3 billion in sales on Black Friday -- an impressive 8.3 percent gain over last year.

So is the consumer a super hero who defies the normal rules? Should Time magazine just come out early and name them ``Person of the Decade''? Can their ability to run down savings and run up credit-card debt just go on indefinitely? Or, as I fear, are we just in this lull where the dark clouds are looming but the coming downpour is just a bit delayed? Call it the perfect lagging storm.

Withdrawal Pains

One deferred wound could be the result of declining mortgage-equity withdrawal. I have long said that consumer spending has been unusually dependent on the dramatic increase in Americans using their homes like automated teller machines, as equity withdrawal increased from a little more than 1 percent of GDP in 1995 to a peak of more than 8 percent in 2005.

Yes, mortgage-equity withdrawal has started to fall, but it still hasn't hit the consumer as much as those like me had predicted. Yet, I tend to share the view of New York University's Nouriel Roubini that equity extracters -- having had such a good run -- may have kept spending because they were waiting for more evidence that the accumulating bad news was for real.

Rising foreclosures, falling home prices and declining consumer confidence may finally force this reality to sink in. And with so-called active mortgage-equity withdrawal, which comes from home-equity extraction and cash-out refinancing, forecast to plunge to an annualized $50 billion in the first quarter of 2008 from $286 billion in the first quarter of 2007, this lagging hit could sting early next year.

Mortgage Resets

Adding to the lagging storm is the timing of when interest rates reset for a large block of adjustable-rate mortgages. Simply put, we haven't hit the high-water mark of ARM distress yet. Data from Banc of America Securities suggests that ARM resets in the first four months of 2008 may exceed the value of ARM resets for the first eight months of 2007 combined.

The composition of the mortgages is no cause for comfort. Christopher Cagan of First American CoreLogic Inc., a Santa Ana, California-based firm specializing in residential mortgage risk management, found that resets will hurt those who ``are most exposed, particularly those with teaser and sub-prime loans extended with low down payments when prices were at or near historic highs.''

Cagan estimates that a whopping 81 percent of borrowers with loans due to reset in 2008 have costly mortgages with initial interest rates of 6.5 percent to 12 percent. After adjustment, monthly payments for these borrowers could rise by almost a third on average.

Oil Prices

And then there are energy prices. While oil has already soared to almost $100 a barrel, auto owners were spared much of the pain in 2007. From May through October, the average monthly price of Brent crude jumped from $67.21 to $82.34 a barrel, while retail gasoline prices actually fell from $3.15 a gallon to $2.80.

In other words, oil prices rose almost 23 percent while gas prices declined 12 percent. It turned out that refiners had been running exceptionally high profit margins on transforming oil into gasoline and heating oil -- the so-called crack spread -- and were able to take the hit without passing it on to consumers.

Yet with crack spreads now narrower, many analysts predict gas at $3.25 a gallon or more by the spring. And the Department of Energy's Energy Information Administration projects that heating oil users might spend 26 percent more to heat their homes this winter than last, while those using other fuels might spend 11 percent to 20 percent more.

Although each of these elements alone might be played down as too small to have a major impact on the economy, a combination of these economic currents might swirl together to weaken the job market and create a negative cycle of expectations. With low personal savings and high credit-card debt leaving consumers sparse cushions for bad times, a perfect lagging storm hitting in early 2008 may be the force that at last breaks the spirit of the resilient American consumer.

(Gene Sperling, author of ``The Pro-Growth Progressive,'' was President Bill Clinton's top economic adviser. He is a senior fellow at the Center for American Progress and is advising Hillary Clinton in her bid for the 2008 presidential nomination.)

To contact the writer of this column: Gene Sperling in Washington at gsperling@cfr.org

Last Updated: November 29, 2007 00:13 EST