Is a recession approaching? Alan Greenspan says the answer is in men’s underwear

Not because he’s concerned about changing bottom-garment fashions — instead, he sees underwear sales as a key economic predictor.

Sounds weird, right? But that’s just one of the many weird ways experts try to predict booms and busts.
“He once told me that… the most private item of clothing is the men’s underpants, because no one sees it except people in the locker room, and who cares?” Longtime NPR correspondent Robert Krulwich said of Greenspan years ago. These sales are generally flat, “so on the rare occasions when they drop, it means men are so pinched that they decide not to replace the underwear.”

The Men’s Underwear Index (yes, there is) confirms Greenspan’s theory: U.S. men’s underwear sales fell significantly from 2007 to 2009, during the Great Recession, but recovered strength in 2010 with the recovery of the economy.

Analysts are still looking for signs that could predict a slowdown. Just as a stampede of animals fleeing to higher ground can be a harbinger of a tsunami, the same rules can apply to the state of the economy.
This is why so much has been said lately about inverted yield curves or the phenomenon of short-term bond yields exceeding long-term yields. This is thought to be a sign that recession is looming, and for good reason: it happened before every economic recession since the 1970s.
But there are a number of less technical — and more fun — measures of the economic downturn, and they’re not all about boxers and briefs. Here are some weird but semi-accurate ways economists are tracking the health of the US economy.

skyscrapers soar

Andrew Lawrence, director and former property analyst at Barclays Capital, created the ‘Skyscraper Index’ in 1999. His theory was that an increase in very tall buildings occurs when we are approaching a collapse – and when a building that smashes the record because the world’s highest is over, a recession or economic crisis is imminent.

“We took the index as far back as the late 1800s and found that even going back that distance we could still find correlations between economic crises and the completion of the tallest building in the world,” he said. he said in an interview.

The Empire State Building was completed in 1930, just in time for the Great Depression, while the Sears Tower (now Willis Tower) and World Trade Center Twin Towers opened in the early 1970s as states States were sinking into stagflation. In October 2009, construction company Emaar completed the exterior of Dubai’s Burj Khalifa, and two months later the Dubai government nearly defaulted.

Lawrence combines these lofty ambitions with cheap credit, overinvestment, and rampant speculation, typical signs of an economic peak.

Today, most of the tallest tower construction projects are on hold. But in another way, billionaires always spend their money to fly to the sky: Jeff Bezos, Elon Musk and Richard Branson are all competing in the space race.

Uplifting lipstick

Estee Lauder Chairman Leonard Lauder created the Lipstick Index during the economic downturn following September 11, 2001. He noticed that the purchase of cosmetics, lipsticks in particular, tended to to be inversely proportional to the economy because women replace more expensive purchases with small pick-me-UPS. In the fall of 2001, lipstick sales in the United States increased by 11%. And during the Great Depression, cosmetics sales overall increased by 25%.

But the theory does not always hold. Research group Kline & Company found that while lipstick sales increase in times of economic crisis, they also increase in times of prosperity.

Related hypotheses abound, however. In 2020, at the height of the Covid economic downturn, Estee Lauder CEO Fabrizio Freda said the lipstick hint had been replaced by a skincare item as customers donned masks and worked from home.

“The lipstick index has been replaced by the moisturizer index,” Freda said. “But the concept of the index is still there.”

Good sweep

What’s worse than losing money? Losing money and being alone.

Dating sites like Match are getting a boost when it comes to busts. The company reported its best fourth quarter results in seven years during the Great Recession of 2009. In 2020, as Covid raged, the the share price jumped 141% between March 2020 and March 2021.

It makes sense. The unemployed have plenty of time to move around. Online dating is (relatively) inexpensive and misery, as we all know, loves company.

If the indicator is correct for the current time, analysts should be concerned. Match competitor Bumble reported stronger-than-expected fourth-quarter results this month and received an upgrade from analysts, sending shares up 22%.


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