On Wednesday, the Census Bureau reported that retail sales were flat in July, showing that inflation is affecting American spending. Consumer spending drives more than two-thirds of GDP, offering important insight into the state of the economy and the likelihood of a recession.
Here are some less-intuitive markers, from lipstick sales to swipes on dating apps, that might qualify as economic tea leaves:
LipstickThe theory was born during the 2001 recession, when Estée Lauder heir and chairman Leonard Lauder noticed that lipstick sales had still managed to climb. The same was true even from 1929 to 1933, during the Great Depression. The phenomenon known as the “lipstick index,” in which purchases of cosmetics are inversely correlated with the health of the economy, remains true today. According to Natalia Bambiza, an analyst for NPD, sales for lip makeup spiked 48 percent in the first quarter of 2022 year over year.
Men’s underwearIn 2008, as the nation spiraled into the Great Recession, the head of the Federal Reserve at the time pointed to one product seen as a good economic omen: men’s underwear. Alan Greenspan told an NPR reporter that men tend to forgo buying new underpants during a recession because it’s less obvious to others when it’s time for a new pair. “You need clothes on the outside,” the reporter recalled Greenspan saying.
RomanceAs the markets fell in 2009, the website Match.com posted its strongest fourth-quarter earnings in seven years. During the pandemic, Bumble and Tinder both soared as singles flocked to the apps while they were stuck at home. “People still need love and relationships in recession — and you can argue they need it more,” Lauren Schenk, an analyst at Morgan Stanley, said on a podcast.
Frozen pizza and mac and cheeseWhen money is tight and eating out is not an option, consumers tend to be strategic about how they spend in grocery stores. They often skip the fresh-food aisles and go straight to the freezer section. Kraft saw sales rise in 2009 as more people bought DiGiorno and opted for boxed macaroni and cheese. A similar trend is happening now — inflation is driving consumers to store-brand items to shave off a few dollars.
ChampagneWhen money is tight and layoffs are prolific, consumers generally aren’t in the mood to pop a bottle of Dom Pérignon. In a 2011 survey, NPR’s Planet Money found that economic indicators derived from sales of the French beverage in the United States were 90 percent accurate. Sales went up in 1999 during the internet bubble and again in 2007 during the housing bubble, and most recently in 2021.
Obviously, there are more substantive predictors of a recession, such as unemployment, spending and wage data. And the U.S. economy already has contracted in two consecutive quarters, another typical sign. That said, maybe think twice before buying that lipstick.
https://www.washingtonpost.com/photography/interactive/2022/how-lipstick-underwear-can-predict-economy/....
Here we have an interesting list of historical indicators to forecast future economic trends. Modern forecasts tend to involve more empirical and high tech methods. Such as using satellite photographs to estimate the number of vehicles sold off car lots. Or to estimate shopper traffic at major retail brands. Is it possible that these historical indirect indicators still apply today?
Do we have a similar list of indirect indicators which could forecast future crypto market trends?
It is known that younger generations have achieved a far higher degree of crypto market participation and mass adoption, in contrast to older generations. Perhaps there are indirect trends for that age group which directly correlate to future crypto buying and selling predictions? Seasons with weak video game rollouts, might see elevated crypto purchasing. A significant span of time with no new iphone or android products might also see elevated crypto purchasing volume.
What do younger generations spend their disposable income on. And how can it tie in to future crypto price fluctuations.
