Underwear: The economic indicator
Economic guru Alan Greenspan is paying close attention to men’s underwear. That’s not as creepy as it sounds.
The former head of the Federal Reserve — the central banking system of the U.S. — says the “men’s underwear index” (yes, it’s a thing) can predict whether another recession is coming.
When boxer and brief sales go down, he says, the economy is soon to follow.
In 2008, just before the last big recession, Greenspan told NPR science and economics reporter Robert Krulwich that men’s underwear sales are an important indicator of where the economy is headed. Even more so than two other indices, dry cleaning (a luxury) and drywall (building trends slow during recessions).
Think about it, Greenspan told Krulwich. Women are much more concerned about the state of theirs. Most men, on the other hand, would wear their underwear to tatters. Locker room? Who cares. Not men. So replacing sad-looking briefs isn’t a priority when times get tougher, taking the back “seat” to women’s and kids’ clothes, dining out, whatever.
Now that inflation is reaching the ridiculous point post-COVID, food and housing costs are rising faster than wages, and all eyes are on this bizarre economy, economists’ are back on men’s underthings.
That’s not the only consumer choice economists look to when anticipating a shift. Once upon a time it was lipstick, with the notion that women would actually buy more lipstick when money is tight, as a cheap pick-me-up.
In the Great Depression years, lipstick sales were up 25%. But according to a March 26, 2022, CNN article, they rose again when times were good, so that one went by the wayside.
Economists started looking at nail polish – another cheap pick-me-up on a tight budget, according to a 2011 New York Times Magazine report.
Feel like skipping the kale salad in favor of a Big Mac? Money minders may be watching, explains a Yahoo Finance article. The Big Mac Index is considered by some international money experts to be a sign of relative economic health (ironic as that may be).
Worldwide prices of the McD’s favorite indicate currencies’ purchasing power. The idea is that if the same cheap burger costs a lot less in one nation than it does in another, that means the currency in the lower-priced market is probably undervalued.
None of these indicators is perfect, but according to multiple finance sources, the most reliable consumer good as a predictor of economic shifting seems to be champagne — and I mean the real stuff, not that $7.99 California muck labeled “sparkling wine.”
French authentic or dressed-up imitation, people have long used champagne to celebrate good times. When times aren’t so good, we tend to buy less. Since they first began tracking it in the 1980s, economists noted the "Champagne Index" is a strikingly accurate indicator of how well the economy is performing.
Named for the region, it isn’t champagne if it isn’t from Champagne, France. In 2006 before the last recession, Champagne’s exports to the U.S. surpassed 23 million bottles. By 2009, they were down to 12.5 million bottles. Similarly, a decline in champagne shipments in 2019 preceded a bad 2020 first quarter.
Whatever you use to celebrate good times, break it open now. Life’s short. No matter what’s going on, buy the good undies, drink the luxury drink, and put on that bright shade of lipstick.
It’s no coincidence stressed spelled backward is desserts. Just sayin’.
Sholeh Patrick is a columnist for the Hagadone News Network. Email Sholeh@cdapress.com.