The Washington Post

What garbage can tell us about the direction of the economy — in 1 chart

It turns out that what we throw out or, more accurately, how much we throw out, tells us a lot about the general economic direction of the country.

At least, that is, according to calculations by economist Michael McDonough, who has produced an absolutely fascinating chart that shows the remarkable correlation between carloads of waste (as calculated by the American Association of Railroads) and the U.S. gross domestic product.

Here’s McDonough’s chart (and you can read more about his methodology here):

If McDonough’s chart is right — and an 82 percent correlation between trash and the GDP is nothing to toss out — it bodes poorly for the GDP.

There’s already some indication of continued economic sluggishness; from April through June the economy grew at an annual rate of 1.5 percent — below the 1.8 percent GDP growth in 2011.

Given that the economy — and whether voters believe President Obama or former Massachusetts governor Mitt Romney is better equipped to make it better — will almost certainly decide the November election, any indicator suggesting the direction we are headed on that front is useful.

And you thought garbage was just, well, garbage.

Chris Cillizza writes “The Fix,” a politics blog for the Washington Post. He also covers the White House.
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