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Consumer Confidence and Inflation: The Data to Watch

Fin - Breakout - US

Same "noise," different day. That slightly altered workplace cliché is the natural response to the daily data dump of financial and economic news. To help tease out the numbers that matter, Breakout brought in Chris Sheldon of BNY Mellon to help us separate the wheat from the chaff.

"I think the very important numbers right now center around consumer confidence and expectations for inflation," says Sheldon. It's a somewhat chilling response given the fact that the two are inversely correlated (when one goes up, the other is usually going down). Despite crude's recent drop, it's obviously going to take a bit of time before pain at the pump abates with lower prices. Sheldon suggests this would help stop, if not reverse, the atypical belt-tightening by the best darn consumers in the world.

"Confidence numbers have clearly come down based on the hit of energy prices... the shock of gas prices particularly," adds Sheldon.

While gas prices may not be counted in the CPI data, which notoriously excludes food and energy, motorists are reminded with every gas station they pass that it's going to cost a small fortune to fill 'er up. Data show that gas prices are actually a small portion of household spending, well under 5 percent, but being hit in the face with the escalating prices does little to help boost morale in an economy with unemployment figures seemingly stuck at 9 percent.

While this reporter is teaching his children inflation, subtraction and vocabulary by noting the weekly upticks ("What's this week's price of $4.35 minus last week's price of $4.20? This is what it looks like when Daddy gets 'hosed'"), that's a steep price to pay for education. Perhaps when Americans can begin to reverse that equation, we'll start feeling good enough to drive to the mall. I'm about another 25 cents from teaching the Macke children how to rant with unfiltered vulgarity.

Nobody really wants that, but we do want to know what you think. Comment below or drop us an email at BreakoutCrew@Yahoo.com.