The double dip in U.S. house prices is raising fears of another recession. But by one measure housing and consumer spending never bounced back in the first place.

    The Chicago Fed's personal consumption and housing index, which tracks housing starts, building permits, retail sales and personal spending, hasn't been above zero since December 2006. That's a 52-month stretch that's unparalleled in the 34-year history of the index.

    The monthly index registers zero whenever activity in those categories grows in line with historical trend. A positive reading shows faster expansion and a negative reading either slower growth or outright contraction.

    Because the index doesn't track house prices, a look back at the past five years (see chart, right) shows a steep decline starting in 2007 but no rebound of any note. This year's readings are above the trough reached in early 2009, but not by much.

    And since falling housing prices won't do much to stimulate either consumer spending or homebuilding, it looks like a good bet that this index is going to stay at low levels for a good long time.

    Once upon a time housing and consumer spending were tied to the performance of the stock market. But that relationship hasn't held since the Fed started in 2009 to buy bonds to ease financial conditions, notes Howard Simons of Bianco Research.

    He attributes the stock market's rise since the 2008-2009 collapse to what you might call the very limited success of quantitative easing – fostering a rise in asset prices without an accompanying improvement in the economy. But it stands to reason that can't last forever, a thought that investors obviously have been chewing on a bit lately.

    If the end of Fed bond purchases restores the link between housing activity, personal consumption and stock prices, watch out below -- and then watch out, after a few months of handwringing, for QE3.