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Non-Leading Indicators

Marjorie Kondrack

IN TRYING TO FORETELL the economy’s direction, former Federal Reserve Chair Alan Greenspan has shown “a keen interest in men’s underwear,” according to CNN Business. “He sees underwear sales as a key economic predictor.”

This isn’t because Greenspan is preoccupied with nether garments. Rather, says an NPR reporter, he believes that “the garment that is most private is male underpants because nobody sees it except people like in the locker room.”

Yes, the men’s underwear index exists. It’s based on the premise that, during normal economic times, sales of men’s underwear are usually stable, but during an economic slump men prioritize other expenses over replacing their underpants.

HumbleDollar contributor Ken Begley may have unwittingly answered the question as to whether or not the U.S. is headed for a recession. A man before his time, he understands the underwear index—as indicated by his unabashedly candid “holey underwear” article.

Meanwhile, just in case you’re wondering, ladies’ underwear seems not to be an issue—presumably because women are more sensitive about wearing worn-out underwear. And who would have the temerity to conduct such an indelicate study, anyway?

There are still risks to the economy, but most economists expect the U.S. to dodge a recession in 2024. Meanwhile, here are a few more ersatz but semi-accurate ways of measuring U.S. economic downturns:

  • Lipstick index. In a recession or bear market, women tend to replace buying more expensive items, like jewelry or handbags, with smaller purchases that act as a treat or pick me up—like a new lipstick.
  • Hemline index. A scan through Vogue magazine indicates that longer hemlines will be one of this year’s trends. That doesn’t bode well for the economy and could be a harbinger of things to come. The theory, which has been around for a while, draws on the premise that skirt lengths get shorter in good economic times—the 1920s and 1960s—when women showed more leg. Hemlines get longer in bad times, such as during the 1930s, after the 1929 Wall Street crash, and during the economic turmoil of the 1970s. Perhaps the midi length, an in-between length skirt now trending, is a sign of today’s uncertainty.
  • Relationship index. Some people seek a new relationship to give themselves a lift during an economic downturn. Research indicates that dating sites see an uptick in business when the economy isn’t doing well. If there’s one thing that’s worse than being low on funds, it’s being low on funds and lacking companionship. This activity could also be a source of low-cost entertainment.

These indexes may not prove to be an accurate way to predict the economy’s direction, but they’re probably no worse than what we hear from professional prognosticators. As George Bernard Shaw is reported to have said, “If all the economists were laid end to end, they’d never reach a conclusion.”

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