Many of the macroeconomic statistics the media breathlessly report are irrelevent to business owners and needlessly frighten their customers
Every Sunday morning this summer, I played softball with my men's over-40 team. We were horrible. And from this I learned a few things.
I learned that it's possible to pull a hamstring catching a pop-up. I learned that men my age should always wear a shirt when playing (or in some cases, a bra). I learned that it's possible to strike out, even in slow-pitch softball. I learned never to slide into second base, never to assume that our third baseman (who wears glasses, black socks, and street shoes) could catch a ball thrown to him, and never to argue a call when your opponent is a lawyer.
And I played with a lot of lawyers. And doctors. And plenty of business owners, too. Smart guys. Overweight, balding, and just a wee bit uber-competitive. But very smart. Or so I thought. As the summer wore on, I started to realize a secret about these so-called educated and experienced men I played with: Not enough of them wore deodorant. Oh, and when it comes to the economy? Clueless!
"So, how's business?" I often heard. "You guys picking up?" was another common question. "Think things will turn around soon?" was another.
You'd think with all the data at our disposal during this "information age" that these guys would have a better handle on what's in store for their businesses. But the problem is that we, as business owners, are inundated with so many facts, figures, statistics, and analysis about the economy we don't know what to believe. There's too much of it—and most of it is irrelevant to our businesses.
who's the consumer conference board?
Take the Consumer Confidence Index. On last Tuesday of every month, this statistic is announced, and it always gets headlines. Is it up? Is it down? Who cares? It's irrelevant to my day-to-day decision-making. The index is calculated by the Consumer Confidence Board. Who? The numbers come from a survey of 5,000 consumers. You know—the people sitting at home during the day watching Dr. Phil. I've never gotten any of these calls. And if I did, one of my teenage sons would've grabbed the phone from me and made farting noises at the telemarketer.
Then there's the stock market. Sure, the tubby guy next to me playing second base gets upset when the market drops. But it's not affecting how he's running his hardware store. He's not going to lay people off or stop carrying a product line just because the Dow lost 100 points. And if he is, he's got much deeper problems other than the fact that he can't bend down far enough to pick up the ground ball that just went through his legs.
Small-business owners don't really care about the unemployment rate, either. Whether the rate's at 9% or 29%, it's not changing the fact that the owner of that dental-lab supply business still looks like an idiot wearing batting gloves during a slow-pitch softball game. I'm sure he feels bad for people who have lost their jobs. Then again, the unemployed carpenter waiting on deck is sniggering at him every time he steps out of the batter's box to adjust those stupid gloves between pitches. More unemployed workers may provide us with more potential people to hire, but the number of jobless claims reported each week has no impact at all on the way we're running our businesses.
Then there's statistics like the gross domestic product and the trade deficit. Who cares? GDP is down, we're told. Like we didn't figure that out already? The trade deficit is up. Like that's impacting the grey-haired architect who's huffing and puffing toward second base even though his fly ball was called foul by about a 100 feet 30 seconds earlier. As soon as the paramedics give him oxygen, he'll be back in the office on Monday hustling for business—trade deficit or no trade deficit. It doesn't matter to him.
interest rates and commodities costs matter
These macroeconomic statistics reported by the media are irrelevant to the small-business owner. Meaningless. At best they give us a sense of the psychological mood of our customers.