Is a Recession Approaching? The Answer Is in Men’s Underwear
So, how’s the economy doing?
You can seek your answers from Wall Street, government statistics, or the latest predictions from economists. But why not examine your husband's underwear drawer, your wife’s lipstick, the latest big skyscraper, or even popular dating sites?
According to former Federal Reserve Chairman Alan Greenspan, 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?" NPR 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: US 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 indexes being watched include:
The Skyscraper Index:
Created in 1999 by Andrew Lawrence, a director and former real estate analyst with Barclays Capital. His theory was that an increase in very tall buildings happens as we're approaching a bust — and when a building that breaks the record for the worlds 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 September 11th, 2001. 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 the fall of 2001, US 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:
Dating sites like Match 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. Unemployed people have plenty of time to swipe around. Online dating is (relatively) inexpensive and misery, as we all know, loves company.