The Consumer Health Index

## What this measures

The Consumer Health Index reads the American household ledger in four parts. Income and jobs: real disposable income growth, real median weekly earnings growth, the unemployment rate and the prime-age employment rate. Prices: CPI inflation, grocery inflation, shelter inflation and the price of gasoline. Credit: the share of card and auto balances going seriously delinquent, the share of income spent servicing debt, the credit card interest rate, the 30-year mortgage rate, and households' own expectation of missing a payment. Cushion and spending: the saving rate, a composite of household financial-stress searches, restaurant spending and real spending on durable goods. Each series is read against its own last five years, signed so that higher means healthier, weighted, and scaled to 0–100.

## Why it matters

Consumer Confidence already reads mood. This index is built from what households earn, pay, owe and do, so that the two can disagree. Confidence can fall while the ledger holds — in 2020, sentiment dropped sharply while stimulus left the aggregate household ledger stronger, with a record saving rate — and confidence can hold while the ledger weakens. The gap between the two is often the more useful read. The dollar, home prices and stock ownership are tracked as separate signals but left out: their effect on a typical household is indirect, two-sided, or too slow for a monthly read.

## How to read it

50 means the eighteen components, taken together, sit at their five-year norms. Above 60 households are gaining ground on most fronts at once; below 40 they are losing it on most fronts at once. Because each component is read against its own recent history, the index measures direction, not an absolute standard of living. Open the components to see which part of the ledger is moving: income, prices, credit or cushion.

## What it does not say

It is an average across all households, and consumer health is unequal: the top of the income distribution drives most spending, while delinquency and financial-stress searches come disproportionately from the bottom. A steady reading can hide a split. Quarterly components (earnings, delinquency flows, debt service) update less often than the monthly and weekly ones, and several are revised.

## Source

Computed by Palanor from Bureau of Labor Statistics, Bureau of Economic Analysis, US Census Bureau, Federal Reserve Board, Freddie Mac and US Energy Information Administration series via FRED; the Federal Reserve Bank of New York Quarterly Report on Household Debt and Credit; the Survey of Consumer Expectations, © 2013-2026 Federal Reserve Bank of New York (FRBNY), which disclaims any responsibility for this analysis and interpretation; and Google Trends. Methodology is Palanor's; the underlying data are public.