NEW YORK–Economists and other analysts are digging through the data for signals the economy is going to slow, and one well-known analyst has identified an index he says is reliable signal: Sales of men’s underwear.
It's far from the only trendline being watched for signs of a recession.
Former Federal Reserve Chairman Alan Greenspan says underwear sales are a key economic predictor.
"He once told me that ... the garment that is most private is male underpants, because nobody sees it except people in the locker room, and who cares?" National Public Radio Correspondent Robert Krulwich said of Greenspan years ago. Those sales are usually stable, "so on those few occasions where it dips, that means that men are so pinched that they are deciding not to replace underpants,” he added, according to CNN.com.
According to the report, the men's underwear index—yes, it exists—backs up Greenspan's theory: U.S. sales of men's underwear fell significantly from 2007 to 2009, during the Great Recession, but gained steam again in 2010 as the economy recovered, CNN reported.
Other Indices
Other indexes being watched include:
- The Skyscraper Index, created by Andrew Lawrence, a director and former real estate analyst with Barclays Capital, who proposed in 1999 his theory that an increase in very tall buildings happens as we're approaching a bust — and when a building that breaks the record for world's tallest is completed, a recession or economic crisis is imminent.
- The Lipstick Index: Estee Lauder chairman Leonard Lauder created the lipstick index during the economic downturn following Sept. 11th, 2001, when he noticed that the purchase of cosmetics, lipsticks in particular, tend to be inversely related to the economy because women replace more expensive purchases with small pick-me-ups. In fall 2001, U.S. lipstick sales increased by 11%. And back during the Great Depression, cosmetics sales overall increased by 25%. (But the theory doesn't always hold up. Research group Kline & Company found that while lipstick sales increase during times of economic distress, they also gain during boom times.
- Dating Sites Index. Another theory holds that dating sites like Match.com enjoy a boost during busts. The company reported its strongest fourth quarter earnings in seven years during 2009's Great Recession. In 2020 as Covid raged, the stock price surged 141% between March of 2020 and March of 2021.
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