What can lipstick and underwear gross sales inform us concerning the financial system?

Is the nation heading in direction of a recession? Ask 10 economists and also you’ll probably get 10 totally different solutions. Which is why some folks have given up on the standard information – GDP, jobs, and so forth – and have as a substitute just lately been tinkering with extra uncommon financial indicators to assist them information their corporations. Listed below are a number of that I’ve seen.

Uniform patches

One recognized financial indicator is jobs and for that we are likely to depend on unemployment numbers from the Bureau of Labor Statistics. However perhaps there’s one thing higher. Just like the variety of uniform patches bought annually. Uniform patches? Sure, these are the emblems that go on the uniforms worn by hundreds of thousands of employees, from quick meals cashiers to drywall contractors. The monetary information of one of many world’s largest makers of emblems and patches – privately held World Emblem – can’t be simply obtained. However the firm’s proprietor just lately informed USA Today that gross sales are up 19% from the identical interval final 12 months. A recession? “We’re not seeing it,” says Randy Carr, CEO of the Fort Lauderdale, Florida-based firm. “It’s arduous to consider there could be.”

Males’s underwear

Ask any man about underwear, they usually’ll often admit the identical factor. When occasions are good, we’re shopping for the great materials. When cash’s tight, we’re carrying these issues till they actually fall off. So do males’s underwear gross sales mirror the financial system total? Some – together with former Federal Reserve chief Alan Greenspan – suppose so. If you wish to try how the lads’s underwear enterprise is doing you may take a look at Hanesbrands or PVH Corp (which owns a number of main manufacturers, together with Calvin Klein and Tommy Hilfiger) or Ralph Lauren Corporation. “Backside” line: males’s underwear gross sales have been principally flat over the previous 12 months.

Lipstick

For essentially the most half, lipstick is a comparatively cheap accent, with a typical tube costing wherever from $5 to $20. Historical past has proven that girls will reduce on dearer magnificence items like make-up and fragrance when occasions are tight. However lipstick? Don’t even go there. When lipstick gross sales improve as luxurious magnificence merchandise equipment lower, that’s one other potential signal of financial headwinds. The place to analysis lipstick gross sales? Attempt the massive cosmetics corporations like L’Oreal, Estee Lauder and Ulta Beauty. All three corporations have proven sturdy income good points over the previous 12 months.

Abroad freight

World transport has a major influence on our financial system and as a substitute of monitoring models and cargo exercise, some economists as a substitute observe the worth of freight. Why? As a result of in a provide and demand world, the larger the demand for transport, the extra freight ought to price. To trace this phenomena, look no additional than the Baltic Dry Index. It is a well-watched measure of freight prices for transport objects throughout the Baltic Sea, one of many world’s busiest transport lanes. So how are freight prices doing? They’re up greater than 55% over the previous 12 months and even barely increased than pre-Covid occasions.

Leisure autos

In the event you’ve by no means taken a visit in a leisure automobile (RV), you’re lacking out. It’s enjoyable and an effective way to discover our nationwide parks. Some economists suppose that RV gross sales are an financial indicator as a result of RVs – a luxurious merchandise – aren’t solely costly to purchase, however they arrive with excessive upkeep prices and have a tendency to calculate fuel utilization by gallons per mile. So how’s the RV trade doing? Judging by one in all America’s largest makers of those autos – Winnebago – not so nice. Gross sales have been declining for the previous few years and the corporate’s inventory worth has fallen 35% up to now 12 months.

I’m solely scratching the floor on uncommon financial indicators. Moreover RVs you may observe the gross sales of champagne. As a substitute of males’s underwear it’s also possible to observe ladies’s hemlines (that are believed to rise and fall together with the inventory market). You may dig into the buttered popcorn index (which some say will increase throughout occasions of recession as a small little bit of a luxurious in an in any other case merciless world). You may even hold observe of hairstyles in Japan, the place some say that girls put on their hair longer when occasions are good and shorter when occasions are powerful. Good luck discovering this information, not to mention making any sense of it.

Goofy financial metrics like these are enjoyable to speak about with your pals and colleagues. However they shouldn’t be taken critically. I run a enterprise, and my go-to financial indicator is my purchasers. I’ve realized that one of the simplest ways to insulate my enterprise from the financial system is to diversify: have as many consumers in as many industries and geographic places as doable. The US is a giant nation, and even when one consumer is reducing again on his underwear purchases in Illinois, I’ll probably have one other shopping for uniform emblems in Texas. Give attention to this as a substitute of lipstick.