How Lipstick and Underwear Sectors Can Predict Global Economy Growth?

The Census Bureau reported on November 23, 2022, that retail sales in July 2022 were flat. According to the report, US spending is being affected by inflation. Over two thirds of the GDP in the United States is generated by consumer spending, which provides important information about the state of the economy and the likelihood of a recession. Underwear sales, dating apps, and lipstick sales are just a few of the less obvious producers.

When Estee Lauder chairman Leonard Lauder noticed that lipstick sales still managed to grow during the recession in 2001, the lipstick theory was introduced. The lipstick index is a phenomenon in which cosmetics purchases have been inversely correlated with nations’ economies. The majority of women purchase lipstick as a luxury fix when money is limited.

Natalia Bambiza, an analyst at NPD, says that lipstick sales increased by 48% year-over-year in the first quarter of 2022.Lipstick is a product that almost every woman would buy, which can help the economy during a recession.

In 2008, as the United States descended into a recession, the head of the Federal Reserve cited men’s underwear as a product thought to be a good economic sign. Alan Greenspan says that the men’s underwear index shows that if money is tight, men tend to avoid buying new underwear during a recession because it is less obvious to others when it is time to buy new pairs, and that people need clothes on the outside.