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What Health Clubs and Acupuncture Tell Us About the Economy

Despite an economy that may have entered a soft patch, Americans are still beating a path to their health clubs, acupuncturists and spas.

Every month here at AIER, we conduct an exercise where we strip out the expenses people pay every month that remain constant, like mortgage payments, to give a closer look at those things people buy more frequently. Our Everyday Price Index for January shows a 1.5 percent drop in prices, mainly due to the impact of lower energy prices, such as gasoline. That’s a bigger drop in prices than we saw with the Consumer Price Index, released by the Labor Department yesterday, which registered a drop of 0.7 percent.

You might think lower prices would signal sluggish demand, and certainly the strong dollar and higher productivity are exerting downward pressure on the price of goods. But as our senior research analyst Theodore Cangero notes, services are a notable counterweight. Prices at health clubs increased 1.4 percent in January, and prices of personal care services, like acupuncture, massage and spas, are up 1.2 percent.

This may reflect the trend towards being more health conscious, but Cangero also notes that these services can be among the first to go when people are out of work or feel unsure of their job security. Higher prices for gym memberships and such may reflect higher confidence in the labor market, he said.

One Comment Post a comment
  1. Gilbert W. Chapman #

    Some years ago I developed what I call the “Tom the Tire Man Economic Index” ~

    One of my neighbors owns two very successful used tire stores . . .

    Whenever I see ‘Tom the Tire Man’, I’ll always ask,”How’s business?”. . . His answers have had quite a range through the years. Below are some of his responses, and how I use each as a Lagging Indicator, Current Indicator, and Forecast Indicator ~

    March 2007 ~ October 2007 . . . Business has been terrible in recent months . . . (Bubble ?)

    January 2008 ~ October 2008 . . . Business is pretty good . . . And has been improving . . . (Recession Coming ?)

    March 2009 ~ Business is Great . . . Only thing is people are buying only one tire, rather than 2 to squeak through the annual state inspection . . . (Bottom of the ‘Great Recession’ ?)

    Now . . . I’m not saying the above economic indicators are any better or worse than those published by the Fed . . . But . . . I don’t have to wait (weeks) to see what the economy has done, and then wait for ‘corrections’ to the Fed’s data for another few weeks . . .

    Yes . . . I sold some of my Equity Mutual Funds during the summer of 2007 . . . And then ‘bought like crazy’ in March of 2009 . . .

    Unfortunately, I don’t run into Tom in the winter . . . But . . . When the snow is gone, and I’m walking my dog again, I’ll ask him once more, “How’s business?” . . . I just hope he doesn’t say, “Terrible ! ! !”

    Like

    February 27, 2015

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