WASHINGTON — Every quarter, the markets wait with bated breath to find out what the latest economic indicators. Everything from the job report to consumer spending to GDP growth tell us about where things are headed.
But did you know that there is also a bevvy of, shall we say, “unusual” economic indicators that some superstitious market watchers have been using for years?
Here’s a sampling of 10 of my favorite of these unusual economic indicators:
Attractive servers in restaurants: Back in 2009, Hugo Lindgren of “New York” magazine coined this theory, which he actually called the “Hot Waitress Economic Index.” It says that the “hotter” the waiter or waitress serving you in a restaurant, the weaker the economy is. Lindgren’s assumption was that good-looking people tend to find higher-paying jobs in good times.
The width and color of ties: Another physical cue to the state of the economy might be the size and color of men’s ties. In good times, the theory goes, men tend to wear colorful ties in hues of pink or fuchsia, as opposed to dark and bland colors in downturns. They also go for skinnier ties in good times and wider ones in bad times, which supposedly reflects reliability and trustworthiness.
The rise of pet thefts: If you see a proliferation of missing pet signs in your neighborhood, watch out. An uptick in missing pets, especially dogs, is considered by some a strong indicator of bad times, since the thieves are banking on a reward, or, worse, a chance to sell your pet on the black market for extra cash.
Sales of lipstick: One closely watched segment of personal spending that may predict the health of the economy is personal luxuries, such as lipstick and nail polish. Studies have found that as the economy tanks, sales of lipstick can surge as consumers look for a relatively affordable way to splurge.
The length of hemlines: One of the older “alternative” economic indicators, dubbed the “hemline theory,” started back in the 1920s by a Wharton economist who suggested that women’s skirts are much shorter in boom times as a way for them to show off their fancy stockings. Conversely, in bad times, when people couldn’t afford new stockings, their dresses grew longer.
The sale of men’s underwear: Before the most recent recession, Federal Reserve Chairman Alan Greenspan had a reputation as someone who had a knack for seeing around the corner when it came to the market. Reportedly, one of the leading indicators he looked at for his predictions was sales of men’s underwear, the ultimate non-luxury purchase. If sales of underwear dipped, that meant that income was down and trouble loomed.
The supply of cardboard boxes: As all of us have become more comfortable shopping online for just about everything through sites like Amazon, the site of brown cardboard boxes sitting on porches has become commonplace. That’s why watching orders for cardboard boxes has become a way to predict how retailers see the coming months: If they’re ordering more boxes, good times may soon follow.
Champagne consumption: One way to predict whether people are feeling euphoric or fearful is to look at sales of champagne. A study by NPR found that sales of Champagne spike when people are experiencing good times, and take a nosedive soon after.
The price of Big Macs: While McDonalds’ made waves recently by serving its breakfast menu all day, it’s actually the price of the flagship Big Mac sandwich that helps predict how a global currency is valued compared to the U.S. dollar. In other words, if the price of a Big Mac in, say, China, is less than it costs in the U.S., that might mean the Chinese yuan is undervalued compared to the dollar.
The “Sports Illustrated” cover model’s nationality: Perhaps for obvious reasons, one of the most popular issues of “Sports Illustrated” is its annual swimsuit edition. But there is also an interesting twist linked to the model who appears on the cover of the issue: When the model is from the U.S., the S&P 500 tends to generate a return above its historical rate, while a non-American cover model has seen under-performance by the S&P 500 for the year. A similar trend also applies to the winner of The Super Bowl, where the market does better in years that NFC teams win.
Keep in mind, the predictive power of any of these indicators is questionable. However, what these show is that the effects of economic strength or weakness are far-reaching and, occasionally, humorous.