Can lipstick and underwear predict economic activity?

The logic behind several economic indicators aren’t holding up.

August 7, 2020

Pucker up, babe.

Armchair economists have long looked to the lipstick index to gauge where the economy’s going.

When money’s too tight for other extravagances, the thinking goes, women buy lipstick to get a luxury fix.

But the premise smudges faster than cheap lip gloss when you look at what’s happening now.

Mask mandates make MAC’s Ruby Woo moot

A report from McKinsey predicted global beauty revenues will dip 20 to 35% this year. Lip color sales are down 15% on Amazon.

In other words: The lipstick index is chapped.

OK, what else is there? 

The hemline index says women’s skirts get shorter in good times and longer in bad.

But who’s wearing anything besides sweatpants right now?

Then there’s the men’s underwear index. During economic booms, men indulge in new undies, former Fed chair Alan Greenspan once said. In bad times, they’re content with ratty shorts.

So does the undie theory hold up? 

The jury’s still out.

We used Jungle Scout to check men’s underwear sales on Amazon — they were up as much as 193% within the past 90 days. Hanes’ parent brand, meanwhile, saw “innerwear” sales dip 27% in Q2.

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