The consumer sentiment index came out today, and it measures 85.5. What does that mean to the average person exactly? Not quite sure.
I have a far more useful index, the Taxi and Café Index, which I think is a highly accurate gauge of the economy. That’s because taxi drivers and café owners are right in the heart of everything, day in day out, and they feel the effects of people’s actions before anyone else.
Two experiences this week illustrate my point…
Yesterday I got in a taxi and asked my standard question “how’s your day going. The answers you get from taxi drivers tell you everything you need to know about how the economy is. The driver grumbled “terrible”. Ok, so nothing unusual about a Sydney taxi driver grumbling. But ask him why and he’ll happily tell you over the 20 minute journey. “Nobody takes cabs any more. Today I’ve only been to the airport once, whereas I’ve usually gone five times by this time of day. And everyone is walking more, look at all those people over there on the footpath”.
Earlier this week I asked my local café owner the same casual question, “how’s things?”. Now that’s the sort of question which normally just gets Aussie politeness, “good thanks, and you?”. But not any more. I had innocently hit a nerve and got another “terrible”. She went on without any need to prompt her – “my regulars are all changing their habits. Some used to come in three times a day, once for breakfast, once for a coffee, and once for lunch. Now they all tell me they’re making their own lunch. Next they’ll stop buying breakfast. I can’t cope with that, we’ll go broke.” [Note that coffee is the last thing to go!]
So I’m not sure what 85.5 means, but I do know what these stories from taxi drivers and café owners mean. So I just can’t believe the government when it says we’re not going into a recession. These stories don’t sound like 2% growth to me. Growth is growth, certainly no growth in the taxi and café industries.
So let’s set up the Taxi and Café Index, and we’ll all have a better read on whether we’re moving towards recession or not.