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8 Weird Signs That Indicate The Economy Is Changing

When the economy begins to shift, there are some tell-tale signs that everybody can recognize. When it’s in a good place, we see an increase in people getting costly divorces because they can afford to. When the economy is on a downturn more people go in for haircuts, because even if they are suffering financially they want to keep up appearances. If you’re wondering which way the winds are going to blow next, here are a few “alternative” indicators that may surprise you.

Men’s Underwear Index

The men’s underwear index (MUI) is used to detect when the economy is coming out of its decline and into recovery. The theory began in the 1970s, when the former chairman of the Federal Reserve Alan Greenspan began to use men’s underwear sales as an economic indicator. When the economy was stable, sales on the clothing staple would rise. As the economy dipped, so would sales as people tried to cut back on their “unnecessary” purchases. Although underwear is a basic necessity, buying it can be put off until the consumer is more confident that they have disposable funds available.

The “Tough” Factor of Marine Ads

When the job market is bad, it’s more tempting for young men and women to join the Marines, and therefore much easier for the Marines to meet their recruitment goals. Thanks to the weak economy, in 2009 the US Marines had already met their recruiting goals for the next three years. When that happens, there is a change in the TV ads imploring people to sign up. The enlistment ads begin to show how hard Marine life is, featuring scenes with recruits dry-heaving, getting hit with fighting sticks, or crawling under barbed wire. That’s because the Corps tweaks its campaign when it can afford to be picky, so it will attract tough men and women who are motivated by the gritty ads to sign up. While a weaker economy leads to more testosterone-fueled ads featuring the extremes of Basic Training, a fruitful economy may produce an ad that shows the Silent Drill Platoon exhibiting their calculated and disciplined bayonet routines.

The Length of Hemlines

This one you may have heard of. Economist George Taylor theorized in 1926 that the performance of the stock market is reflected in the length of women’s hemlines. So, when the market is booming hemlines get shorter, and when there’s a “bear market” hemlines go down. If you’re curious as to what the skirts of the next year will look like, you can always attend Fashion Week! Glamour made a reference to the hemline indicator, observing that the recently-fashionable uneven hemlines (short in the front, long in the back) would indicate the “volatile” Dow Jones average. If that’s true, then beware the day maxi skirts are in vogue.

Big Mac Index

It may be hard to believe that a hamburger sold from an international fast food chain would be used as an indicator in The Economist, but the Big Mac is actually a good tool for measuring exchange rates. Part of the charm of McDonald’s fast food is that it’s the same everywhere around the world, which means that by comparing the prices of international Big Macs we can get a sense of how different currencies are valued. For example, when The Economist compared prices in 2012, a Big Mac in Switzerland was $6.81 (showing an overvalued currency) while in India the burger was $1.62 (an undervalued currency). The exchange rates may not be exact, but they comparison is good for predicting exchange rates over the long run, and seeing how the value of the American dollar is holding up.

The Number of Long-Distance Relationships

When job prospects are far and few between, it can make the choice to move away from a loved one that much harder. But everyone needs their livelihood, so when the economy goes down, most people go to where the money is. People may start out looking for jobs close to where they live, but as time goes on and desperation grows, those who are unemployed cast their net wider and wider. A survey by outplacement firm Challenger, Gray, & Christmas showed that 18.2% of job seekers who had found success relocated. And when one person relocates to a new job it can be difficult for their partner to follow, especially now that we are in an age of two-career couples. According to the US Department of Labor, about 51% of married households saw both spouses working. In the best of times a person may be willing to uproot their life and quit their job, but if there is no assurance of finding employment when they follow their partner, it’s enough for two lovebirds to seriously consider going at it long-distance.

NFL Blackout Games

When money is tight, most people can’t afford to purchase tickets for sports games and instead opt for watching the game from home. The only problem is, if enough people decide to watch the game from their couch, there is no televised game. The NFL has a “blackout rule,” which states that if a team does not sell out their home games 72 hours before kick-off, they might not be telecast locally. Blacking out games dates back to 1973, and is used to encourage people to buy tickets. The rule has only affected a handful of games since its conception, until the recent recession. This method can end up alienating fans – especially when times are hard and general-admission costs about $60/ticket.

Dentist Visits

Dentists see an increase in new patients, as well as more visits from regular patients when the economy is doing well. New patients usually mean that more people are getting full-time jobs with health insurance. Regular patients are more likely to make appointments for cosmetic dentistry, like teeth-whitening, when they have extra money to spend. Likewise, patients who experience financial woes are not making it to the office for their regular check-ups, follow-ups, elective procedures like veneers, or even necessary procedures such as getting fillings. As a result, emergency rooms see a spike in dental-related visits. Unfortunately emergency physicians don’t have the means for the intense tooth work, like filling cavities or crowning a chipped tooth.

Lipstick Index

The term “lipstick index” was coined by the chairman emeritus of Estee Lauder, Leonard Lauder. The basic idea can include nail polish and foundation, and explains why such a large quantity of lipstick was sold in the early-2000s recession. The premise is that when money is short, people do without large luxuries such as eating out or extravagant vacations, and instead purchase small pleasures, like cosmetics. Cosmetic sales are also useful for tracking spending trends, like when consumers begin to forgo expensive cosmetic brands for cheaper ones.

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