E-Paper
Forget markets, here are 8 other early indicators of a recession: Brothel index, lipstick index, and more
Brothels, beer, lipstick, and other unconventional indicators can be surprisingly accurate in showcasing how the economy is doing.
Though the stock market is one of the most widely known reference point for detecting a recession, there are quite a few other indicators which are much more unconventional in nature, but may deliver surprisingly accurate results.
This discussion was initially sparked by Catherine De Noire, who is a manager of a legal brothel, a Ph.D. candidate in organizational psychology, as well as an influencer, who said that business at her brothel unexpectedly dipping is usually a sign that the economy is in trouble.
Also Read: Governor Malhotra says Donald Trump's reciprocal tariffs on India ‘bigger worry than inflation’
A list of unconventional economic indicators
The following is a list of unconventional economic indicators, according to a HuffPost report.
1) The brothel index
As noted by De Noire, declines in her brothel business is an early indicator that the economy is heading for a slump. On top of this, she also believes that she still faces the effects despite being based out of Europe due to the huge global influence the US has.
De Noire suggests this is because of people saving money or reallocating their spending toward things they find more essential, most likely because to prepare for challenges ahead.
2) The stripper index
Strippers are in many cases, the first to notice a downturn in the economy, according to the report. And this is because of the same reasons as to why the brothel index can work.
3) The beer index
The type of beer which people are drinking can be a good recession indicator since beer is a discretionary spend and a social spend, making people cut their spending on it when they are worried about the economy, the report quoted Jack Buffington, an assistant professor of supply chain management at the Daniels College of Business at the University of Denver, as saying.
An example would be people spending less money on draft beers or expensive craft beers and rather picking up cheaper six-packs.
Also Read: What are 5 big takeaways from RBI’s MPC meeting announcements?
4) The men’s underwear index
Declining sales of men’s underwear can be a recession indicator, according to former US Federal Reserve Chairman Alan Greenspan
5) The lipstick index
When money is tight, consumers are known to substitute costly purchases with cheaper luxuries like lipstick which are also tiny comfort purchases that can give psychological boosts without a hefty financial outlay, according to the report.
6) The online dating index
When the number of paid subscriptions for online dating services fall, but free or cheaper lower-tier dating app use increases, it can be a recession indicator since it can be a sign that people are using it for cheaper entertainment and companionship instead of expensive nights out.
7) The hemline index
Historically, shorter hemlines meant economic optimism, and longer hemlines signaled economic trouble, according to the report which added that it quantifies consumer confidence and social mood, though fast fashion makes this a more challenging metric to use.
8) The brunette index
Fewer blonde hairdos can be a sign a recession since people look to cut back spending on this. One theory suggests when the economy dips, people tend to go for darker hair colours (like brunette), while in boom times, lighter shades like blonde become more popular.
