Usually, it begins quietly. There are no big red banners or abrupt crashes—just subtle cues buried deep inside customer behavior. Even though the labor market remains stable and the stock market is booming, a number of unusual indexes subtly convey a different message.
These are not included in the standard toolbox. The charts of the Federal Reserve do not include them. However, they are quite similar in what they imply: a change in attitude, a reduction in expenditure, a turning point that is missed by the models that the majority of economists use.
For example, there has been revived interest in the Men’s Underwear Index. Although it seems satirical, it is grounded on basic sense. Underwear is not visible, but it is also not optional. People put off replacing the items they don’t see when their budgets are short. Before it spreads to other areas, a decline in sales here can be a very powerful indicator of financial distress.
The Cardboard Box Index is equally subtle but seen everywhere. The foundation of contemporary logistics, from wholesale shipments to e-commerce packages, is cardboard. A decline in cardboard consumption indicates not only fewer boxes but also less items being moved, fewer customers purchasing, and businesses cutting back. It subtly conveys the slowdown in the economy before quarterly figures do.
| Indicator Name | Description | Key Insight | Popularized By |
|---|---|---|---|
| Men’s Underwear Index | Tracks dips in men’s underwear sales as a sign of tightened spending. | Suggests financial caution even on basic private goods. | Alan Greenspan |
| Cardboard Box Indicator | Measures cardboard shipment volume to signal changes in production and demand. | Indicates shifts in consumer goods flow and output. | Freight Industry Analysts |
| Lipstick Index | Notes rising lipstick sales during downturns as affordable luxury spending persists. | Reveals coping behavior via small indulgences. | Leonard Lauder (Estée Lauder) |
| Stripper Index | Observes tip income trends in exotic clubs as early sign of reduced discretionary spending. | Reflects caution in leisure and entertainment budgets. | Informal/Anecdotal |
| Hemline Index | Correlates skirt length trends with economic optimism or caution. | Suggests mood-driven fashion reflecting macro sentiment. | 1920s fashion economists |
The Lipstick Index is another interesting example. When larger luxuries disappear, this one follows the rise of smaller ones instead of declining sales. Big-ticket purchases like vacations and house remodeling are frequently avoided by customers during lean times. However, they will still treat themselves to a little treat like a new lipstick or fragrant lotion. This behavior has, surprisingly, proven a very effective indicator of a general decline in optimism.
Because they are individualized, all of these indicators are effective. They concentrate on choices made in restrooms, break rooms, and bedrooms rather than boardrooms.
Some analysts may laugh. Ultimately, these aren’t official measurements. They are not academically rigorous or employ standardized models. However, that’s exactly what makes them so creative. Compared to typical data sets, they are less susceptible to the latency. Real-time reactions are based on unadulterated behavior rather than edits.
I recently heard an Ontario warehouse manager remark, “The market doesn’t notice when boxes slow down.” But we do. That remark stuck in my mind.
Hedge funds and behavioral economists are beginning to pay attention to the so-called Stripper Index, which monitors tipping trends at exotic dancing clubs. It’s an exceptionally human metric. Long before they eliminate necessities, customers reduce their entertainment and charity. Tips get smaller. Visits to clubs decline. Not nightlife, but an early retreat from non-essentials, particularly when confidence begins to falter, is the implication.
Even though the Hemline Index is more arbitrary, it still provides information. Economic and emotional signals have long influenced fashion. Whether they realize it or not, designers know how customers are feeling. High street collections have seen a slight increase in hemlines over the previous 12 months. It’s part of a larger picture that implies restraint is subtly making a comeback, though it’s not conclusive.
Remembering that these indicators are not perfect is crucial. However, their versatility is astounding. They occupy that hazy area where intuitions develop before judgments are made, between concrete facts and public conduct.
Simultaneously, official indicators such as the Leading Economic Index and the yield curve had already shown warnings, only to be confused when GDP continued to slowly rise. These behavioral indicators, in contrast, only show the change rather than attempting to model the result.
We start to hear a different story when we focus on the little things, including unshipped goods, empty drawers, and delayed purchases. One that is steadily yet slowly taking shape.
Analysts aren’t the only ones taking notice. These indicators are now included by several businesses under internal headings like “behavioral liquidity” or “consumer softness trackers.” Despite their clinical sound, many names have personal origins. They understand that people express stress in many ways, such as by remaining silent at checkout counters rather than by filling out surveys.
Businesses may find it especially helpful to keep an eye on these indicators. You run the danger of missing the undercurrent if you rely your planning solely on payroll statistics or inflation projections. Be ready for a more cautious market if sales of lipstick increase while sales of underwear stagnate.
Customers might gain a better awareness of their environment by comprehending these indicators. Rather than being taken aback by a decline, people may perceive the shift through more subtle, commonplace cues. the queue to pay. the delivery delays. the decrease in pedestrian traffic.
These peculiar indices provide texture, which algorithms occasionally miss, through a combination of intuition and observation. The environment they unveil is based on decisions as much as numbers. And real economic realities start with choices, especially during difficult times.
We may obtain a wonderfully powerful early warning system by observing how people actually live, including what they purchase, what they avoid, and what they grasp for when uncertainty looms. Even though it’s not flawless, it’s very evident that the slowdown, if it’s coming, is already leaving hints.
