Thomas Kase (AECsoft) recently tipped me off to an online tool that shows the "US Misery Index". The site charts the combined misery level of inflation and unemployment within the country at a relative point in time. Judging from how the index looks today, things aren't so bad (that is, if you're not working for Bear Stearns). In an email, Thomas pointed out to me that "if these numbers were adjusted for fuel prices, then I think we'd see an even flatter line." While it's true that inflation and unemployment are not yet at significantly elevated levels, they're definitely trending up -- perhaps inflation more than unemployment. Still, if we measure the economy from an historic consumer perspective relying on just these two factors, things aren't all that bad yet. Which to me is further evidence that judging the state of the economy and consumer pain is more art than science. So next time you read the headlines on CNN about "trouble at the pump" or parents who "can't afford to buy eggs for their kids" because of inflation, remember the actual "misery index". It tells a different story indeed.
- Jason Busch