The stock market crash in the fall of 2008 sent shockwaves through our economy -- but now two years later there are signs that we are in a recovery.
While most forecasters study charts relating to the price of gold, silver, the Canadian and U.S. dollars as well as housing starts and the real estate market -- there are some interesting consumer trends as well. When the stock market plummeted in October 2008 -- lipsticks sales jumped by 25 per cent. This is know as "The Lipstick Index" a theory that has been proven over the years to show that as the economy slows, women watch their spending but buy more lipstick.
Why? The reason is that it is a relatively low cost item that can have a big impact on a woman's appearance making them look and feel good.
Now that the economy is improving, analysts have noticed another trend -- "The Lingerie Index." As the economy improves women are more likely to move up from basic lower cost undergarments to more expensive lingerie.
At the Bra Bar in Toronto, Victoria Lounina says women are once again buying fashion bras that can cost between $200 and $300.
"Women want to spend more because they want lingerie that is a higher quality, that will make them feel more feminine and that will last longer," she said.
Economists extrapolate that if women are spending more on undergarments, chances are they are also spending more on many other items -- hence the economy is entering a recovery phase. So while some economists pour over charts and graphs the answer to whether the economy is improving may be no further than in a woman's lingerie drawer.
Key Points:
- During tough times, lipstick purchases can be a way to gauge the economy. Sales often increase as women boost their mood with inexpensive lipsticks instead of pricier bigger-ticket items
- Strong sales of lingerie suggest shoppers are willing to indulge again
- Other signs of a stronger economy include sales in movie theatre snacks, company holiday parties, restaurant outings, gourmet coffee purchases, dry cleaning and cardboard boxes
- Signs of a weaker economy include sales in makeup, romance novels and inexpensive fashion accessories
- Two purchases that tend to stay constant include chocolate and alcohol (larger quantities of less expensive wine during tough times)
- The Hemline Index is another way to gauge the economy – some research suggests the hemlines on women's skirts may rise along with stock prices (it was first proposed by economist George Taylor in 1926)
http://www.ctv.ca/CTVNews/CanadaAMColumns/20110120/pat-foran-blog-lingerie-110120/
