The Week in Review: January 19, 2026
Forks, Knives, and Economic Clues
Let’s review one narrow economic indicator that provides a useful, though not standalone, measure of the overall economy’s health.
The US Census categorizes it as ‘food services and drinking places.’ That can best be described as restaurants and bars.
When the economy is riding high, most people feel optimistic and are more inclined to make discretionary purchases—non-essential items or services. This would include eating out.
As highlighted in Figure 1, eating out has far outpaced grocery purchases over the last four years. Notably, the upbeat pace has continued in recent months, suggesting an expanding economy.
One drawback in Figure 1 is that it’s not adjusted for inflation. Plus, restaurant inflation has outpaced overall inflation, as measured by the US BLS’ Consumer Price Index. Gains may simply be due to rising menu prices.
Figure 2 attempts to adjust for inflation by comparing the annual change in sales at restaurants with the annual change in the CPI for eating out. Given that adjustment, sales are outpacing inflation in all but two months.
As we look to 2026, a sluggish hiring picture could dampen economic activity, while recent Fed rate cuts and fiscal stimulus in the just-passed tax bill seem set to support the economy next year.
This is not a sign of economic weakness, despite sluggish hiring and consumer confidence surveys that reflect a gloomy mood. If economic anxiety were a big concern, we’d probably see weakness in this indicator, like fewer trips out or people switching to cheaper restaurants.
That’s not the case. As with any anecdotal measures of economic activity, it must be paired with broader economic reports. Today, most economic data is signaling an expanding economy.
Market Summary
TWO FOR THE ROAD
The human brain uses roughly 20 watts of power (about the same as a dim light bulb) yet can outperform many AI systems that require thousands of watts to run. Researchers say this efficiency gap is one of the biggest unsolved challenges in artificial intelligence. - Science Daily, March 27, 2025
“Wealth is not about having a lot of money – it’s about having a lot of options.” - Chris Rock
Please let me know if you have any questions or concerns that you would like to discuss.
I hope you have a wonderful week!
Warmest Regards,
Bill Stordahl, CFP®
Managing Director
Stordahl Capital Management
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