When reading articles about polls on how people rate the health of the economy, it’s essential to remember that the health of our economy is not a matter of public opinion. What the public thinks of our economy is of little relevance when the majority doesn’t understand what quantifies economic health. We apply data and financial indicators for this, not sentiment.

In a recent article, a consumer was quoted as saying that the current high cost of eggs is a sign that things are going badly. The reality is, contrary to common belief, the fact that egg prices remain elevated is actually a sign of consumer health. If the price increases and the consumer stops buying, it’s a sign that the consumer may not be in a good financial position. In that scenario, the consumer stops buying, and the price comes down. If the price goes up and stays up, it reflects that although the consumer may be frustrated to the point of venting in a consumer sentiment poll, they’re still buying. It’s a sign the consumer isn’t hurting enough to stop buying overpriced eggs. Since the price of eggs remains high, it suggests that consumers are still willing to spend despite the high price. 

Sixty-eight percent of the U.S. economy is driven by consumer spending. When consumers continue to spend, even through inflated prices, it’s indicative of a healthy economy. Consumer health is one of the most significant economic indicators, and the health of consumers is primarily determined by their employment status, making the employment rate another key economic indicator. When prices are high, it means consumers are spending, leading to strong corporate earnings. Corporate earnings translate to growth in your stock portfolio, provided your portfolio is allocated correctly. When prices drop, it means no one is spending, and when no one is spending, corporate earnings fall. Falling earrings lead to job cuts. Job cuts lead to even less consumer spending, creating a vicious cycle. Perhaps in a struggling economy, you can save a few dollars on your grocery bill, but you’ll have bigger problems than the price of eggs.

High prices, while painful, are indicative of a thriving economy. Raising a growing athlete, I’m just as bothered by the price of eggs as you are. But instead of complaining, let’s go get a share of the earnings. We can only eat so many groceries, but the share of earnings we can acquire over time is relatively limitless. Let’s make it a goal to acquire so many shares that what we stand to gain from a thriving economy far outweighs the cost of our grocery bill.

On a side note, the laws of nature dictate that we’re approaching the time of year in the Pacific Northwest when chickens start laying more eggs. The recent bird flu outbreak has had a significant impact on the egg supply, but the supply is expected to recover, and with it, demand is expected to decrease.