Think economists aren’t funny? Some of the leading indicators they’re watching can offer at least a smile, if not a chuckle.
Take, for example, take the humble hamburger. Smart Money’s “Global Recovery Watch” column points out that an uptick of sales at McDonald’s worldwide can be considered evidence that the worldwide recession is abating.
Then there’s the lipstick leading indicator, originally observed by Leonard Lauder (chair of cosmetics company Estee Lauder). The idea is that increasing purchases of lipstick indicate women are seeking “affordable indulgence” amid persistent economic gloom. Kiplinger’s contends the trend’s not bearing out in the current recession (lipstick sales are flat), but offers that lipstick is possibly being replaced by increased spending on eye makeup. Both mascara and eyeliner sales have increased substantially in the current recession.
Also from Kiplinger’s: the meaning of the gator glut. Alligator farmers rely on upscale bag sellers like Louis Vuitton to purchase their hides — and, these days, there’s no demand whatsoever for alligator hides.
Alan Greenspan favored linerboard — the base component of cardboard — as an indicator of economic health. The reasoning? Most purchases are shipped in some sort of cardboard box. Linerboard prices have dropped steadily over the past couple of years, bearing out Greenspan’s theory of correlation with the economy. (On the plus side, industry trade publications suggest that linerboard prices may be stabilizing — potentially signalling a bottom to our recession.)
Other offbeat tracking tidbits: pasta sales (we buy more pasta, less meat when money is tight), hemlines (shorter when times are good), and even baked beans (popularly tracked in Great Britain as an indicator of slow growth and poor consumer confidence).
The most publicized oddball index? The Men’s Underwear Index (yes, that’s its official name, and it even has an acronym: the MUI). In theory, men put off underwear purchases in tough times — and, when they start buying again, it’s a signal things could be improving. It’s an indicator that economic researchers have been tracking for over three decades — and, the good news is (as reported by The Washington Post), research shows men are buying again, after a long slowdown in underwear sales.