The Misery Index

Can the misery index really serve as an indicator towards commissioning & building new products? What preconditions does one ought to bear in mind...?

May 01, 2025

Take a look at this recent report furnished by Goldman Sachs on the impact AI has had on jobs across various industry segments in the USA. And one could just use a multiplier (n) where 2 < n < 5 to extrapolate that percentage to represent the effect of disruption these advancements in technology have had world over as of 2025…

The least affected industry gleaning insight from the report seems to be “Building, Grounds Cleaning & Maintenance”, the one involving lots of physical labor, also bracketed under the non-skilled category.

“In the recent past, I personally have had to get on calls with product people from across the world (more so in the USA) who told me that they HAVEN’T been able to find employment into a suitable product role for a little over 9 months now. When I happened to ask them a question or two about what they think is going wrong & where they think they could be faltering, most of them appear clueless & don’t seem to have an answer to it”

How miserable things are in some places is just scary & seems to be getting worse by the day. Not so surprisingly, there’s a term depicting this whole downturn of a scenario as it is possible that this may not be the first instance of something like this happening world over & may not be the last either. It is technically given by the MISERY INDEX.

Originally the MISERY INDEX is known to be a representative of the overall economic condition specifically targeting the well-being & the quality of life a given country. And there are two main factors that contribute to this, they are the:

UNEMPLOYMENT RATE &
INFLATION RATE

which collectively point to the ability to purchase (/ bare) essential goods & be able to live a decent-good life [macroeconomically both could be deeply interconnected as for some economies].

📝NOTE: The Index here in question ought to be a weighted average given how the conditions could differ from city to city & as much as also different places within the city as well. Living off downtown is economically never going to be the same as living off the suburbs & that statistic is city agnostic.

Getting into the MATH:

MISERY INDEX = UNEMPLOYMENT RATE + INFLATION RATE

Supposing, the UNEMPLOYMENT RATE is pegged at 7% & the INFLATION RATE is at 5%, then we’d have:

MISERY INDEX = 7% + 5%

MISERY INDEX = 12%

In an ideal scenario, the Federal Reserve targeting INFLATION at 2% & economists targeting the UNEMPLOYMENT at 4-5% for a healthy economy, an IDEAL rate for the MISERY INDEX would be pegged at 6-7%, when anything above that could be perceived as deviation from normal with the severity increasing with every tick in percentage points.

Given the INDEX at 12% in our example above may be perceived as ABNORMAL as it could turn out that there are many without jobs & the money not possessing that great a purchasing power either.

So, how can this be factored in towards making any worthwhile decisions for building new products?

The fact that there is a higher rate of unemployment would also mean that many may be in dire straits over their financial position but that doesn’t necessarily take away anything from the regular life they would be leading.

Whatever be the situation, people still got to eat, drink and live don’t they?

Be it consumer goods, lifestyle-oriented products, food & groceries, the demand in these contingents may not have gone down a wee bit, although the choices may now differ. When you had someone spending $40 on an average per month on essential goods, they may now be forced to rethink it & bring it down to $20. But the desires / wants just won’t die all of a sudden.

📝NOTE 1: When it is true that the MISERY INDEX could lead insight, helping reorganize the strategy thinking about what to build next & what not to, it is also true that it could apply ONLY to some domains / contingents & not all.

So, here are the main factors one ought to earmark as a direct correlation of the insight gleaned from the MISERY INDEX:

1) REFACTOR THE NEEDS

It is possible that the markets may feel a need to unscrupulously drop what could even be one of the best-selling products & look to move to something of an alternate. The motivation behind this could be driven by many specific factors that carry a mass appeal, like for instance say, better health benefits. So, the focus here essentially shifts from “the most economical option on offer” to “the most effective option / bang for the buck”.

Economies where unemployment rate is high often tend to carry some other problems, two of them that are perched at the very top here could be mental health & physical health issues. Depression is a common trait associated with unemployment problems & one tends to spend on things unwanted like for instance junk food, only to realize the ill-effects of it & then alter their course, changing their diet plans on its head owing to the awareness / consciousness to eat & live healthy.

Irrespective of what’s worked in the past, it is important one keeps an open-eye & a close tab on the market & its changing needs so as to be able to gauge & refactor them in towards building products that walk with the changing trends. What’s even better would be to envision / build something that could force people to think deeper, question the rationale behind their current choices & moot / drive those desired change(s).

For ex: A branded bakery chain deciding that it would be better if they can tone down the production of the all-purpose-flour-based bread & pivoting on bread made out of wheat with grains / oats / millets in them as it is perceived as a much healthier option.

2) QUESTION OF AFFORDABILITY

Pricing could make a lot of difference to product adoption & in most scenarios the market could then be ruled by that someone who ceases the opportunity to rebrand, relaunch & retarget the market with a product that could be more affordable. The focus in such cases can quickly go from “look for the best without caring too much for the price” to “look for the cheapest & abundantly available alternative (at least for now)”.

If your market suddenly moves from being albeit a little careless / spendthrift to conservative, it is perhaps time for you to rethink about your product in the way you are packaging it. It is important you think of long-term customer loyalty, looking to cater to those users retaining them by rebranding / relaunching products now making it more economical / affordable to them.

The one thing that could work like a charm in this scenario would be to rebrand & relaunch a toned-down version of the product so as to cater to the mind-shift. So, that may mean stripping off some of the premium features from the product & offering a basic / skeletal version anew to what could now be a rate-sensitive market without compromising deeply on those core features.

Share 🎯 "The Product Web"

For ex: A premium shampoo brand with a clay variant may look to a rebrand & launch it with an alternate composition of clay (UTISOLS / say RED CLAY found in abundance in the South / South-East USA), now costing them 1/4^th the previous version, of course choosing to brand it differently from the existing product

3) RETARGETING

Yes, you were ruling the market with a previously launched product. When that’s a great achievement, it is important to reassess where the org. (/ the product) stands as of today & right now. And if you stop to analyze it closely, it would be highly unlikely that the same product would befit the current market given the changes in trends over time.

So, just as much as that is factored in it becomes imperative to concentrate on the positioning of the product, spending a bit of time repositioning the product in the market establishing relevance to conditions prevalent right now. Repositioning would also help the org. understand where they stand in the market as pitted against the competition, providing enough insight to strategize the content.

Post sorting out repositioning, the focus ought to shift to some retargeting towards helping the org. build marketing content that is relevant to the current market space with an onus on their problems & their needs so as to carrying something of a mass appeal.

For ex: An org. specializing in building online courses studying the market & building specific courses to cater to a specific market generated from an economic downturn like say mass lay-offs & using that situation to generate & float third-party content that appeals to the relevant users / user groups.