Keep An Out for These Unusual Economic Indicators and Predictors of Recession
Are Underwear and Lipstick sales, the indicators of the Next Recession? It’s difficult assessing the entry to a period of negative economic growth using standard indicators. The WSJ asked eminent economists in October about recession probability in 2023, with answers from 1% to 100%. With divided expert opinion, odd recession indicators like makeup, underwnet sales and whether if the Phillies won that year’s World Series, offer added insight and alternative narrations to expert economic predictions. Upon closer inspection, oddball indicators cannot really predict a coming recession.
If the economy is headed for a long dip, so do Spam sales as per the Spam theory. A 12-ounce can of canned pork- Spam is an affordable protein source and during the 2008 recession, market analysts noted that during the Great Recession in 2008, Hormel employees worked overtime to supply Spam, nationwide. But Spam sells well despite economic trends with sales breaking records from 2015-2021, over a period of strong economic growth, and pandemic-induced recession in early 2020. The Spam index is not infallible.
A Bookworm Indicator
One sign of recession is that people read more books during hard times since 1880, as per the American Library Association review of circulation data from 18 libraries during the 2001 recession. Libraries provide a safety net for people hit hard by the economy, as libraries are an essential resource for internet access to apply for jobs, or information on power tools, personal finance data, or cookware. Libraries are community assets no matter what the economic state of our society.
A Sports Connection
When the Major League baseball team, the Philadelphia Phillies seem to win a World Series tournament, the economy loses, if you believe the Phillies Index. Philadelphia baseball team have won world championships around the times of major economic downturn: 2008 – Great Recession), 1980 – recession, and 1929 / 1930 – Great Depression, but of course, this is highly unreliable.
The Lipstick Index theory of recession is that when the going (read economy) gets tough, the tough just buy more lipstick. Estée Lauder’s lipstick sales rose in times of hardship, as in the 2001 recession. Unlike jewelry, or dresses, lipstick is an affordable luxury that women indulge in when money is tight. The Lipstick Index showed warning signs of recession, but the data is misleading and the Lipstick Index as a deep recession indicator, is unlikely.
In 1926, George Taylor suggested that the economy influenced women’s fashion as skirts got shorter when women showed off expensive silk stockings during economic upturn. In downturns, hemlines were longer as women lacked money for expensive stockings and hid that fact. The adoption of cheap nylon stockings in the 1940s and in the 1960s as women ditched skirts and dresses for pants. The Hemline Index cannot predict if a recession is coming, but a recession does foretell skirt lengths. This statistical tool is useful to fashion design decisions on hemline lengths at least a year in advance.
Briefs Glance at the Economy
Falling men’s underwear sales predict economic downturn as financial pressure, forces cut back on the least necessary items first. Men will keep their existing underwear in service longer than they normally would. The last purchase not made is underpants. If the theory holds, the global economy maybe in trouble. The third quarter of 2022 saw an 11% year-over-year drop in innerwear sales due to low consumer spends.
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