How your underwear drawer affects the economy
Have you ever considered that the state of your underwear could reflect the state of the economy?
You might think I’m talking pants, but your choice of underwear is just one of a number of unofficial retail indicators that indicate how well the economy is doing. Here's why, and some of the others to look out for.
The consumer pants index (CPI)
People buy more pants when they are feeling wealthy, and make do with their faded old undies when times are tight. If you’re comfortably encased in a pristine pair of briefs while reading this, that’s a sign better times are here. If they’re tired and stringy, we’ve hit rock bottom.
An end to boob and bust
One of the first and most famous consumer indicators has fallen out of fashion - the hemline indicator. In 1926, business professor George Taylor noted that hemlines rose during the Roaring ‘20s and fell in the Great Depression, possibly because women couldn’t afford silk stockings and covered their legs instead.
Now fashion isn’t so rigid. Short skirts, long skirts, these days anything goes. So what do we have instead? Breast implants. The number of plastic surgery operations fell by 18% in the US in 2009, in what they call the great boob-bust. Surgeons blamed it on the sagging economy.
But things have improved, the American Society of Plastic Surgeons reports there were 13 million more people going under the knife in search of a better look in 2010.
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Don’t gripe if petrol prices are rising, that’s a sign the economy is on the mend. When economy is booming, demand for oil from industry and motorists rises, and so does the price. The oil price dipped to around $38 a barrel at the peak of the credit crunch, but recently hit $108. A lot of the recent rise has been a result of concerns about unrest in the Middle East, but prices had been rising long before that.
The trouble with this indicator is that if the oil price gets too high it throws the entire economy into reverse. Many analysts believe the 2008 stock market collapse was triggered by US consumers hitting the brakes when the oil price hit a record $147 a barrel.
Leigh-on-Sea station car park
My friend Ben moved to Leigh-on-Sea in Essex in July 2007, when the global economy was still bubbling along, and the train station car park was full every weekday.
At the depth of the recession, the car park was half empty, as people lost their jobs in London or walked to the station to save on petrol and parking charges. Currently it is about three-quarters full, which is hopeful sign. This doesn’t just apply to Leigh-on-Sea, test it out at your local station.
When times are hard, and businesses are contracting, what do you gossip about at industry events? Company closures, budget cutbacks, redundancies, and all that miserable stuff.
Rob Powell hits the streets to get your views on banks, bonuses and the blame game.
When times are good, you’re chatting about promotions, vacancies, pay rises and bonuses.
So what are you talking about now?
The property section in my local paper is a lot thinner than before the recession. Sunday newspaper property supplements don’t thud on the carpet like they used to do. Dinner party chat is more Lib-Con and Clegg-Cam than sub-prime, self-cert or buy-to-let. People down my street are moving home less frequently.
It’s all part of the great property price indicator, one of the surest signs of economic activity. Having said that, my freesheet has a bigger property section this week, which suggests things are on the up. Perhaps I’ll mention it tonight, we have friends coming over for dinner....
The emissions index
After years of failing to cut the country’s carbon footprint, one thing has finally worked: the recession. The UK pumped out fewer greenhouse gases as economic activity declined after the credit crunch. If the air in your street is suddenly clogged with particulates you can breathe easily again, it means the economy is bombing along.
When you’re struggling to meet everyday bills, you forget about setting money aside for 10, 20, 30 or 40 years into the future.
In 2008, total non-state pension contributions in the UK dropped for the first time since records began in 1995, from £86 billion in 2007 to £82 billion, as people had more immediate cash concerns.
Have you just had a blazing row with a loved one? Was it about money? You’re not the only one. More than one million families are arguing more due to money worries, according to a study by Clydesdale and Yorkshire Banks. You’ll know the worst is over when you start talking politely to each other again.
The good news is that divorce rates recently hit a 32-year low, with figures out this month showing just 10.5 couples per 1,000 are splitting up.
A vintage year for the economy?
I get no kick from champagne... of course not, because in a recession fewer people can afford it. Champagne sales in the UK fell by 15% in 2009, as we found a cheaper tipple to drown our economic sorrows. White Lightning anyone?
This is a lovemoney.com classic article, originally published in May 2007 and updated