Former Federal Reserve Chairman Alan Greenspan has a keen interest in men’s underwear. Of course, not because he is interested in boxer shorts, but because he sees the sale of men’s underwear as an important economic indicator.
“He once told me that the most hidden of the clothes we wear are men’s underwear, because no one sees them except those who go into the locker room and nobody cares,” an NPR reporter told Greenspan a few years ago. Robert Kralwitch. Sales of men’s underwear are usually stable, “so in the few cases where they are declining, it means that men are struggling so much that they decide not to replace their old underwear.”
The Men’s Underwear Index confirms Greenspan’s theory: Men’s underwear sales declined significantly from 2007 to 2009, during the Great Recession, but rose again in 2010 as the economy recovered.
And this is not the only unexpected indicator that economists use to predict a recession.
The Skyscrapers Index
Andrew Lawrence, a former real estate analyst at Barclays Capital, created the Skyscraper Index in 1999. His theory was that when we see many very tall buildings being built, we are close to the peak of the bubble. And when a new tower breaks the record for the highest in the world, then a recession or a crisis is approaching.
The theory is confirmed even by data from many decades. The Empire State Building was completed in 1930, just in time for the Great Depression, and the Sears Tower (now called Willis Tower) and the World Trade Center Twin Towers opened in the early 1970s as the United States plunged into stagnant inflation.
In October 2009, Emaar Construction completed the Burj Khalifa exterior in Dubai and two months later, the Dubai government almost went bankrupt.
Today, most record-breaking skyscraper projects are frozen, but billionaires are still spending their money looking to the skies: Jeff Bezos, Elon Musk and Richard Branson are competing in a new space race.
The Lipstick Index
Estee Lauder President Leonard Lauder created the Lipstick Index during the financial crisis that followed the terrorist attacks of September 11, 2001. He noted that sales of cosmetics and lipsticks Their finances are not going well, women are replacing more expensive purchases with small “gifts” to make them happy. In the fall of 2001, lipstick sales in the US increased by 11%. And during the Great Recession that followed the financial crisis of 2008, cosmetics sales increased by 25%.
Of course, research has shown that lipstick sales are increasing even in good times. And inside the pandemic, where everyone wore masks, Estee Lauder CEO Fabrizio Freda said lipstick sales were replaced by moisturizer sales, but the index remained correct.
The Online Dating Index
What’s worse than losing money? Losing money and feeling lonely. So online dating sites like Match are seeing traffic increase when the economy is doing badly.
The company had the best results of the fourth quarter of the last seven years in the Great Recession of 2009. And in the midst of the pandemic, its share jumped by 141% from March 2020 to March 2021.
Behind this indicator there is a simple logic: The unemployed have more time to spend in front of their cell phones. And online dating is a relatively inexpensive way to entertain and have fun when you feel bad about your financial situation.
moneyreview.gr with information from CNN
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