Economic Indicators

This from a reader:

Found along Hyde Road last week.

Have you heard the CPI is up, the DJI is down, the WPI is steady and GDP is negative but not as bad as last quarter? And, what about those seasonally adjusted unemployment rates, housing starts and the LIBOR-swap curves?

I always get mixed up on which ones are leading indicators and which ones are lagging indicators so I can’t figure out if things are getting better or worse. I’d really like to have an economic indicator I can actually understand without a financial whiz kid to explain it. So here’s what I’m thinking….

Most mornings, I walk a couple of miles with my significant other. A couple of summers ago, I got so disgusted with all the roadside trash, I started my own litter control project. Two or three times a month I make the rounds and pick up beer cans, water bottles, the entire array of McDonald’s wrappers, pizza boxes, plastic bags and assorted other things people don’t want in their cars.

Now here’s the thing, as the economy got progressively worse, the amount of roadside trash went down. It’s particularly evident in the number of empty beer bottles – from a high of 2 or 3 six packs in a single week to a recent week with not one roadside beer bottle. Of course, McDonald’s is still there, we’re in a recession not a depression.

Seems obvious that as economic conditions get worse, the roadside trash levels go down and as things start to look better, trash levels go up. I’m sure there are graphs and formulas to explain this behavior and draw correlations to some marginal propensity to spend or some other esoteric analysis. I’ll leave that to the experts but just based on casual observation it looks to me like the Roadside Trash Index (RTI) could be the next leading indicator of our economic health.

Maybe the talking heads and the financial wizards should consider working with “adopt a highway” programs – roadside trash may be a more reliable indicator than the economic analysis we get now.

ADDENDUM - last week the beer bottles were back – not in big numbers, but enough to perhaps indicate a change is coming and good times will soon follow.