KAI, the Kitchen Appliance Inventory Index
In the late 90s, I read that you could you learn more about the economy, while sitting in a truck stop in the middle of the country, than reading economic papers. One famous investor even regularly called the head waitress at a truck stop every month on the dot to know how business was doing. Coffee consumption and how much diesel is filled up at giant truck stops are a leading indicator of how the economy is doing. As a matter of fact, Professor Ed Leamer of UCLA partnered with Ceridian, who manages payment cards for trucking companies—drivers, to create the Ceridian-UCLA Pulse of Commerce Index, or PCI.
“Trucking represents inventory and finished goods in motion,” said Leamer. “In a normal economy, the trucking activity is proportional to GDP.”
Former Fed Chairman Alan Greenspan on the other hand favored the Men’s Underwear Index as an unconventional economic indicator. This measure suggests that declines in the sales of men’s underwear indicate a poor overall state of the economy, while upswings in underwear sales predict an improving economy.
After unsuccessfully looking around on Black Friday, and Small Business Saturday, for a common, yet not inexpensive, large kitchen appliance in stock, I conclude it has to be an economic indicator of some sort. How can they be out of this item already? I am purposefully being coy here on the item, as it is a Christmas gift after all.
I called major kitchen appliance stores and department stores from San Francisco to Gilroy. I checked also their online inventories. I visited the manufacturer’s website. Even Amazon didn’t carry the item anymore, except at hugely inflated prices.
I therefore introduce the KAI, or Kitchen Appliance Inventory Index. I don’t really know how to interpret it yet. Perhaps a low inventory means that the factories in China weren’t running due to the covid pandemic. Or perhaps it means that folks are cooking more at home, have depleted the inventory long before the Christmas shopping season, and therefore many restaurants will be at risk. Or it could mean that home exercise equipment will be in high demand, as folks gained a few too many pounds from delicious home-made cakes. It is strange nevertheless.
I’ll get Marketplace’s Kai Ryssdal, Molly Wood, or the undergrad economic student living under my roof on the case.