Puoh a stripper’s tweet American to end up quoted in a article of Guardian? Yes, if you have a degree (therefore, it is assumed, competent) and, checking your income, you decide (she did it in May) to sum up and talk about crisis. At the macroeconomic level. He had noticed a drop in his income: “Fewer high-income people were joining the club, and when that happens, you know something bad is going to happen.” For this reason, on Twitter, you issued a warning: «The strip club is unfortunately an indicator of trends and I assure you that we are in a recession.’ Another, yet another, unusual indicator of an economic crisis. After “R-word index” and miniskirts, diapers and champagne, lipstick and men’s boxers.
Not just lipstick. The other “indexes” of economic crisis
The tweet went viral and, confirming the theory, the strip club’s business plummeted between May and December, and revenues halved compared to the same period of the previous year. But not just those of his club. In the United States, the unemployment rate is at 3.4%, the lowest in half a century, but interest rates are instead the highest they have been in decades. The pace of growth, economists predict, will be much slower.
Tips and attendance at striptease clubs is, in short, one of them unusual indicators that even economics professors regard as signs of economic crises. In addition to GDP and jobs, even private behavior can in fact signal, anticipating or even just confirming, the approach of a recession. It happens for various, unconscious and mysterious reasons.
Lipstick effect, accessible luxury in times of crisis
Among these unusual signals the best known is the so-called lipstick index (lipstick effect, or lipstick index). The theory was first proposed by economist and sociologist Juliet Schor in 1998. As he tells ForbesSchor she found that women bought more lipstick, even from expensive brands, during economic downturns. In her book, The Overspent Americannoted that when money is scarce, women prefer to pay a lot for a lipstick, perhaps to wear (and show off) in a public bathroom, and less for daily cleansing products, those used in the bathroom at home: «They look for a accessible luxury», he wrote, «by buying ‘hope in a bottle’». In short, maybe you don’t change the car but a lipstick… why not?
From the Great Depression to today
The lipsticks sold speak. Like a hundred years ago, at the time of the Great Depression of 1929 when, while industrial production collapsed by 50%, women ran to buy makeup in greater quantities than usual, so today. In Germany the newspaper Taggesspiegel he titled “A little luxury against crises” reporting that in 2022, Berlin’s cosmetics sales exploded by 16%. And the lipsticks sold in the last 12 months have been eight million, against six in 2021. An opposite trend compared to that of the last few years (also thanks to the mask effect) which however makes economists worry.
As Coco Chanel said: lipstick as an antidote to sadness
From a psychological point of view, the process is quite simple: I can’t buy what I want, I go for what I can have. But also, to use the words of Coco Chanel: «Si vous êtes triste add more rouge to lèvres and attach» (If you’re sad, put red lipstick on your lips and hang up). But, after all, even Winston Churchill, having to ration so many products while England was under the bombs of the Nazis, excluded cosmetics from the list.
The idea, and the phrase “lipstick index,” caught on in 2001 when Leonard Lauder, president of Estée Lauder, reported that a great many people were buying lipstick despite the recession post 9/11. “When lipstick sales go up, people don’t want to buy clothes,” she told al Wall Street Journal. The lipstick index didn’t hold up during the pandemic: sales have collapsed despite the economic situation. Obviously: Covid 19 beats Lipstick effect. With the masks, even the sense of lipstick has disappeared.
Men’s underwear, according to Alan Greenspan
Other unconventional indicators of crisis? Men’s underwear. He recognized it as such no less than Alan Greenspan, the former chairman of the Federal Reserve: during times of economic crisis, people would wait longer to replace worn briefs and boxers. And men in particular would continue to make themselves go well for months and months. Here, for those wishing to question the effectiveness of the indicator, a fact: the sector market collapsed during 2022 and the shares of the manufacturer of men’s briefs Hanesbrands, reports the Guardianstand at 50% of their year-ago price.
From Tinder to the phenomenon of the “Brunette in a recession”
Still, another indicator would be found in the online dating app, which work especially well during recessions. People avoid paying for drinks in bars and meet online. Even lately the business of Match Group, which owns Tinder and Hinge, is booming (+7% for Tinder alone).
If these weren’t enough, here are more. Like the number of people who give up dyed blonde hair: is the so-called phenomenon of “brunette in recession” which Business Insider also talks about. It can make you smile but the cost of a quality coloring treatment can be expensive, and make you smile less.
Champagne, miniskirts & Co. Surprise economic indicators
Others unusual indicators of economic crisis are reported by the international news agency Bloomberg. How it Champagne Index, seen as a harbinger of good news in the mid-1980s, when imports soared during the Wall Street boom. Consumption reached 15.8 million bottles in 1987, then plummeted during the ensuing recession, falling to 10 million bottles in 1992, according to Champagne Bureau data. This pattern was repeated during the Great Recession: consumption soared to 23.2 million bottles in 2006, then plummeted to 12.6 million by 2009.
Still, the length of the skirtsclosely monitored since the Great Depression. The short skirts of the Roaring Twenties were in fact replaced with long dresses during the Great Depression and mid-length dresses during World War II. More recently, miniskirts were popular during the period of (relative) pre-pandemic prosperity. Today between post-Covid, war in Ukraine and economic uncertainty, midi dresses are all the rage.
From lipstick to diaper rash
Then there is the theory ofdiaper rash, where parents try to save money by changing their newborns less often during recessions. And this causes an increase in sales of ointments and creams to treat irritation. Indeed, Bloomberg specifies, sales volume in 2022 for these products is substantially higher than in previous years, while unit sales of diapers are down from before the pandemic. Another unusual index, that of cardboard boxes: usually indicate the trend of manufacturing activity as many goods are transported in cardboard boxes.
The more we talk about it, the more there is
In the early 90’s, L’Economist he then invented the”R Word Index“Meaning what the index that evaluates the occurrence of the word recession in newspaper articles. And he used it to signal the start of US recessions in 1990, 2001 and 2007. Google Trends offers a similar index. Searches for “recession” have actually increased during periods then termed recessions since National Bureau of Economic Research. And they’ve been on the rise since June 2022.
Finally, another unconventional indicator is the slowdown of technology companies, also monitored by Bloomberg. And even on this front, no, it’s not going well.
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