The big news today is happening on the highways…

But first, let's look at the basic figures.

Yesterday produced a weak rally in the stock market - with the Dow up 68 points. Oil lost $3, to close at $128. The dollar rose slightly. And gold got whacked for a $17 loss, but still closed above $900.

You'll remember how we left you yesterday…we hope you remember, because we can't. But we think we said that the U.S. consumer should be cutting back. His energy is much more expensive. His food is more expensive. His house is going down in price. He can't borrow as he used to. He has to cut back, we keep saying; he has no choice. And when he cuts back, the United States has to go into a slump. And here we agree with Warren Buffett; it will be longer and deeper than most people think.

We agree with George Soros too; the slump will result in a "noticeable decline in living standards" for most Americans.

But as we signed off, we noted that we were waiting for the evidence…the proof that the consumer is cutting back.

Now we have it. And it comes from the highways.

"Steepest drop in driving since '40s," says a CNN headline item.

According to the report, Americans drove 11 billion miles less this past 12 months than they did the year before.

In the 1940s, the reason for the cutback in driving was obvious to everyone - the country was at war. The auto companies practically stopped making cars so they could turn their production to tanks, jeeps, and trucks. Oil too was diverted from leisure use in the 48 states and used to power ships and airplanes.

But after the GIs came home, they got married, bought cars, filled up their tanks, and headed for the open road. Every year since, until very recently, the national odometer showed more miles driven than the year before.

Now, something big has happened…for the first time since WWII, Americans are driving less.

America's truckers, too, are pulling off the road. A report in the New York Times says that many cannot afford to fill their tanks. Diesel fuel is selling for as much as $5 a gallon. This puts the cost of filling a 250-gallon tank well above $1,000. And many truckers fill their tanks three times a week.

Naturally, the auto industry has to downshift. Not only because gasoline is so expensive, but also because the average household is struggling to pay its other bills too. After it pays the interest on its debt, it has less left over than ever before. And then, it has to pay for food, gasoline…and other things, many of them imported. Of course, food and energy are rising sharply, but until recently Americans could count on low-cost Asian producers to cut prices on our imports. Now, import prices are rising at 14.8% - the highest rates since the early '80s.

We've already accused the official numbers of lying; now we call Bill Gross, who runs the biggest bond fund in the world, PIMCO, to the stand, to help make our case.

"If we calculated inflation the same way other countries do it, our CPI would be 1% higher," says Gross. (Bond yields would be 1% higher too, he notes.)

Prices are going up more than the official numbers tell us, in other words. About the only thing that is going down, for the typical American, is the price of his house. And here the news that house prices are going down more than we thought too. The latest survey results from Case/Shiller show the average house in America's largest 20 cities down 14.4% in March over a year earlier - the largest drop on record.

Who can blame the lumpenconsumer for getting down in the dumps? Everything that we warned him about is happening to him. His bills are coming due…his assets are going down…and his income is falling.

Yes, dear reader, that too. The job numbers show a modest decline in employment. What they don't show is the many people who are "self-employed" who are having a hard time finding work. One of the great benefits of the Internet was that it allowed workers much more flexibility. Many found they could leave the 9-to-5 office routine, move to the beach or the mountains and still continue to work online. Here in London, for example, there are probably thousands of Americans who are enjoying life in the city, while continuing to work via the worldwide web. We see them in Starbucks, for example, with their heads down and their laptops up. Freelance work was a big advantage for the former employee, because it allowed him to go where he wanted when he wanted. It was a relief to the employer too because it permitted him to reduce internal office costs and fixed expenses. But in a downturn, the easiest thing for an employer to cut is the out-of-office staff. He can just send them an email!

Often these freelance consultants are mature workers who then find it very difficult to get back into the regular market.

"Out of a job and out of luck at 54," begins an article on the subject in today's press. Apparently, there are many thousands of people who are "too young to retire, too old to get a new job," says the report.

Curiously, these facts and circumstances are not showing up in the stock market. Instead, they are showing up in consumer confidence numbers - which continue to sink. Traditionally, stock indices and consumer confidence numbers coincide. When stocks go up, people are confident; when they go down, they lose heart…but not necessarily in that order. In 2005, however, the numbers began to diverge. Stocks rose. Confidence fell. Investors saw clear sailing. Consumers saw rough seas.

Who's the better weather forecaster? We've put our money on the consumers.

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.