Men Underwear as Economic Indicator & Other Bizzare Signs of a Recession

 

 The "underwear economic indicator" is a term that was popularized by former Federal Reserve Chairman Alan Greenspan. It refers to the idea that changes in the sales of certain consumer goods, such as underwear, can be used as an indicator of the overall health of the economy.

The theory behind the underwear economic indicator is that when people are feeling financially secure, they are more likely to purchase non-essential items such as new underwear. On the other hand, when times are tough and people are feeling financially insecure, they may be more likely to hold onto their money and delay purchasing non-essential items like new underwear.

Greenspan was known for using unconventional indicators, such as the sales of men's underwear, to get a sense of the direction of the economy. While the idea of using underwear sales as an economic indicator may seem comical, there is some evidence to suggest that it can be a useful tool.

For example, a study conducted by market research firm NPD Group found that men's underwear sales tend to rise during periods of economic growth and fall during recessions. This suggests that there may be some truth to the idea that changes in underwear sales can be used to predict changes in the economy.

There are many other unconventional economic indicators that are not commonly used by economists, but which some people believe can provide insight into the health of an economy. Some examples of unconventional economic indicators include:

The "Hemline Index": This is the belief that the length of women's skirts is correlated with the state of the economy. The theory is that during times of economic prosperity, hemlines rise, while during times of economic downturn, hemlines fall.

The "Lipstick Index": This is the belief that sales of lipstick tend to increase during times of economic downturn, as people look for small indulgences to cheer themselves up.

The "Nickleback Index": This is the belief that the popularity of the band Nickleback is correlated with the state of the economy. The theory is that when times are good, people have more disposable income and are more likely to spend it on concerts and other forms of entertainment, leading to increased demand for bands like Nickleback. Conversely, during times of economic downturn, people are less likely to spend money on concerts, leading to a decline in the popularity of bands like Nickleback.

While these unconventional indicators are not taken seriously by economists, they can be interesting ways to talk about economic indicators and the various factors that can influence the economy.