The Whiplash Index

Where the economy stands vs the story being told about it · updated September 7, 2026
SWEET SPOT DENIAL shrinking, story says fine RUNNING HOT growing, but overhyped DESPAIR shrinking, story too gloomy UNDERRATED growing, story too gloomy Real economy (private data): shrinking ← → growing Story vs reality: too gloomy ← → too hot Q4 '23Q3 '24Q2 '25Q4 '25Q1 '26 NOW (Sep 7)
✓ good for the economy ✕ bad for the economy • neutral fact

What it says right now

  • Fewer goods are moving across the country than a year ago
  • People are going out to eat less often
  • Official jobs and inflation numbers still look strong
  • Stocks and lending markets are priced as if nothing is wrong

What just changed

  • Small businesses cut both workers and hours once summer’s big events ended
  • The official jobs report flipped from weak to strong in one month
  • Borrowing got cheaper for companies, a sign markets expect no trouble
  • The government started buying back its own long-term bonds

What we are waiting on

  • The Fed decides on interest rates in mid-September
  • Fresh inflation numbers land just before the meeting

The bottom line: the reading sits in Denial. The measures that count real activity are slowing, while the official story and market prices say everything is fine. Gaps like this do not last: either reality catches up to the story, or the story comes back down to reality.

How it is measured

The left-right position comes only from private data: freight volumes, restaurant traffic, and private labor readings, mapped so the middle means a flat economy. The up-down position is the “extension” reading, like an RSI for the economic story: how far the official numbers AND market prices are running from what the private data shows. It blends the gap between official and independent inflation measures, whether official and private jobs data point the same direction, and whether stocks and credit are priced for the economy the private data describes. The path shows quarterly averages over a 3-year window. Data referenced: Cass Freight Index, Truflation, BLS CPI, ICE BofA high-yield spreads (via FRED), S&P 500. Informational and educational only; not investment advice.