10 Unusual Recession Indicators You’ve Never Heard Of

Recession indicators can be weird. In today’s uncertain economic climate, people are worried about a recession, which we call the ‘R-word.’ Let’s explore the ten weird recession indicators that might indicate an economic downturn is coming. 

The Context

Everyone drinks more during a recession; they want to forget — Christian Audigier

The air is thick with the looming presence of the R-word, as the winds of change blow through the business world. After a brief but dazzling period of triumph in the wake of the COVID chaos, companies are now bracing themselves for the possibility of a downturn by preparing to streamline their operations.

Some estimates suggest that the global economy’s fluctuations are currently slowing down before picking up again, but with a significant caveat: it’s uncertain if we have reached that point yet. Business cycle changes, including fluctuations in economic output, are mainly driven by unpredictable factors, making it difficult for economists to predict the timing of the next recession. To address this issue, experts rely on indicators such as declining GDP, rising unemployment rates, and unexpected drops in consumer spending.

While these indicators are useful in many cases, some unconventional signs can also serve as warning signals. That’s why we’ve compiled a list of the top 10 bizarre recession indicators, and we’re delighted to have you here to check it out.

1. Men’s Underwear Index

Believe it or not, your underwear choices could be a recession indicator of an impending slump. According to popular belief, during tough economic times, men tend to view underwear as a luxury item and cut back on spending in this area. Instead of buying new pairs, they extend the life of their old underwear.

However, as the economy begins to improve, buying new underwear is often one of the first discretionary purchases men make. This strange yet compelling indicator reflects not only consumer behavior but also the impact of economic constraints on purchasing decisions.

So the next time your favorite underwear brand, such as Jockey aka PAGE Industries, experiences a decline in sales, it might be time to stock up to help the economy.

2. Lipstick Index

The creation of the “Lipstick Index” highlights the importance of women’s participation in economic trends. Leonard Lauder, the former chairman of Estee Lauder, coined the term during the 2001 recession. Lauder observed a surge in lipstick sales during that time, suggesting that women turn to cosmetics as an affordable indulgence during economic instability.

The rationale behind this index is simple: In times of recession, consumers may be short on cash, but they still seek ways to reward themselves and alleviate their financial worries. As a result, sales of reasonably priced beauty products tend to rise, while sales of expensive luxury items like cars decline.

3. The Champagne Index

When it comes to Champagne, we tend to think of it as the drink of celebration. However, research has shown that during times of economic uncertainty, people are more likely to curb their impulse to indulge.

The Champagne Bureau has noted that consumption of this effervescent beverage reached a peak of 15.8 million bottles in 1987, only to plummet during the following recession and drop to 10 million bottles by 1992.

This trend appears to be driven by consumer emotions that deter them from splurging on luxury or pricey items. In short, when times are tough, the popping of Champagne corks tends to become a more reserved affair.

4. Japanese Haircut Indicator

In Japan, there is a peculiar recession indicator that involves the length of women’s hair. According to Nikkei magazine, women tend to cut their hair short and keep it that way during times of economic downturns, only to let it grow out when the economy is thriving.

This trend first became apparent in 1997, a year when Japan was facing financial difficulties. The logic behind this indicator is that women tend to trim their locks during tough times because they have less money to spend on expensive hair products and treatments.

As a result, shorter hair becomes a practical and more affordable option. So, the next time you notice a sudden surge in short haircuts, it might be worth paying attention to the state of the economy.

5. The Alligator Population Index

This unique recession indicator is derived from the luxury market and the preferences of the affluent, unlike other indicators that reflect the behavior of the average consumer. The theory is that a decrease in demand for high-end handbags made from alligator skin signals a decline in consumers’ purchasing power.

In 2009, Louisiana’s alligator farms experienced a significant downturn as the market demand for alligator skins decreased. However, we do not suggest counting the number of alligators in your vicinity as a means of research for this indicator.

6. Buttered Popcorn Index

7. The Garbage Indicator

The amount of waste we produce as a society can serve as a useful indicator of economic fluctuations. The idea is that economic prosperity leads to higher levels of production and consumption, which in turn leads to greater waste generation. Conversely, during times of economic decline, individuals tend to spend less and produce less garbage.

Therefore, if you want to gauge whether a recession is on the horizon, you might consider talking to the garbage collector who comes to pick up your trash. They could provide valuable insights into the overall state of the economy.

8. New Dating Index

9. The Cardboard Box Indicator

Take a quick look around your home, and chances are you’ll spot a cardboard box from an online retailer like Amazon, First Cry, or Flipkart. During a recession, consumers tend to purchase fewer non-durable goods, resulting in a decrease in demand for cardboard boxes.

In turn, cardboard box manufacturers may reduce production due to the decreased demand, resulting in a decline in sales for the industry as a whole. Thus, the sales of cardboard boxes can serve as an indicator of economic activity and the overall state of the economy.

10. The R-Word Index

Conclusion