Our Perspective
Q2 2026
Contrarian Insight | There Is No Average Customer
The economy grew 1.5% in the second quarter. It is a useful number. It is also a number that no business actually experiences.
No customer walks into a store and spends 1.5% more because GDP increased. No farmer receives the national average commodity price. No manufacturer borrows at the federal funds rate. No trucking company hauls the average freight load.
And very few businesses sell to the average American consumer.
Averages become most dangerous when the things being averaged are moving apart.
That appears to be happening now.
There is an American economy in which hundreds of billions of dollars are being committed to artificial intelligence, data centers, power generation and the infrastructure required to support them. Land is being acquired, electricity contracted, equipment ordered and people hired at a pace that looks considerably more like a boom than a 1.5% economy.
There is another economy in which a farmer is borrowing near 7% against tighter crop margins and wondering whether another piece of equipment can make it one more season.
Both are America.
There is a consumer who can absorb higher prices, continue traveling, shop at Costco for value and pay a premium for something that saves time or improves health.
There is another consumer comparing unit prices, moving purchases to private label, eating out less often and deciding which expenses can wait until payday.
Both show up in retail sales.
There is a large corporation issuing debt into a public market where spreads look remarkably calm.
There is a smaller business sitting across from a commercial banker being asked for another covenant, another guarantee and a little more equity.
Both are supposedly borrowing in the same credit market.
This is the problem with averages. They are mathematically correct and occasionally economically useless.
For a long time, businesses could get away with managing to them. If the consumer was “strong,” add inventory. If GDP was growing, increase the sales forecast.
If rates were coming down, assume financing would get cheaper. If the category was expanding, add capacity.
That worked reasonably well when the tide was moving most boats in roughly the same direction.
It works considerably less well when the boats are heading different ways.
The important question for an operator today is therefore not whether the American economy is strong or weak.
It is which economy are you actually in?
If your customer is a middle-income household buying groceries, the answer may be hiding in basket composition, private-label penetration and promotional response—not GDP.
If you manufacture food, your economy may be determined more by cocoa, milk, packaging, freight and retailer deductions than by consumer confidence.
If you farm, national employment statistics are considerably less useful than local basis, land rents, input costs, crop prices and the attitude of your lender.
If you operate a factory, 1.5% GDP matters considerably less than what is happening to your order book, utilization, labor availability and the price your suppliers are quoting for the next six months.
This sounds obvious.
Most useful things do after somebody says them.
The danger comes when management uses the macroeconomic story to explain away evidence sitting directly in front of it.
“The consumer is resilient” can become an excuse for weak velocity.
“The economy is slowing” can become an excuse for losing share.
“Inflation is moderating” is not particularly comforting when your own landed costs are rising.
And “the category is growing” is of limited consolation if someone else is doing all the growing.
The national economy matters. Interest rates matter. Inflation matters. GDP matters.
But they are the weather map, not the view through the windshield.
At 1.5% growth, America is not uniformly booming and it is not uniformly struggling. It is sorting—by income, industry, geography, access to capital, competitive position and increasingly by the ability of individual companies to translate demand into cash.
That sorting creates winners that look strange against the macro numbers and losers with perfectly respectable explanations for why they lost.
For operators, the lesson is less exciting than predicting the next recession and considerably more valuable:
Know your customer better than the consumer.
Know your costs better than the CPI.
Know your demand better than GDP.
And know your business well enough that when the averages tell you one thing and your economics tell you another, you know which one to believe.
The average economy is an interesting place to study.
Just don’t make the mistake of thinking your company operates there.
