Unusual economic indicators like lipstick, underwear sales mixed as economists warn of recession

What you probably already know: As more banking and investment leaders warn of a possible recession, citing official signs like the growth of gold market and a slowdown in home sales, everyday consumers have their own economic indicators. The lipstick index, for example, suggests that when sales of lipstick spike, that consumers are seeking “inexpensive treats” to make them feel good when they can’t afford other luxury items. While the theory has never really been proven, social media has picked up on the concept of unusual recession indictors and run with it.

Why? Fashion has long been tied to the economy. We wrote earlier this week about luxury fashion brands struggling as inflation and economic uncertainty have consumers seeking less more conservative outfits to avoid flaunting their wealth. At Paris Fashion Week last year, outfits skewed more toward business casual than couture, prompting Vogue to write that “the return of business casual to the club is a recession indicator.” Minimalism and more stark looks tend to show up when the economy is slower.

What it means: The men’s underwear index was popularized in the early 2000s by Alan Greenspan, when he suggested men’s underwear sales go down during a recession because men wait longer to replace their tattered undergarments. The Federal Reserve Bank of St. Louis actually has a special index for “underwear and nightwear,” and things are looking more positive than other indices right now. Other signs of a recession are more concerning though, as the use of pay-later apps like Klarna heat up, and these systems get added to food-ordering and grocery store purchases.

What happens now? There are other ways to watch for economic indicators in everyday life. For example, if you’re seeing more ads for the military or continuing education and vocational programs, those tend to be early indicators that people are losing jobs and looking for other opportunities. Public two-year colleges experienced double-digit growth last year, and that trend seems to be continuing. Cardboard box sales are also a good indicator, as retailers need fewer of them when consumers are buying less. Others include increased confidence in off-price retailers like T.J. Maxx and Ross, and cheaper food options like fast food.