Some Clues That a Recession Is Coming

"Alan Greenspan knows a thing or two about underpants. American history's second-longest-tenured Fed chairman also knows a thing or many about recessions, obviously, and the two are related: Sales of men's underwear, Greenspan once reportedly suggested, are inversely proportional to economic anxiety. As the theory goes, men see underwear as a luxury, not a necessity. When money gets tight, boxers get holey."

"According to folk wisdom, when a recession is imminent, sales of snacks, cigarettes, champagne, and cardboard boxes also go down. Demand for lipstick, laxatives, instant noodles, used clothing, high heels, scary movies, and mini liquor bottles, meanwhile, goes up. Hemlines drop; law-school applications rise. Baby butts get rashy. Halloween gets less spooky. People gravitate toward public libraries and private labels. They spend less at restaurants."

Alan Greenspan popularized a folk theory that men's underwear sales fall when economic anxiety rises, framing underwear as a luxury item shed in hard times. Popular recession signals include falling sales of snacks, cigarettes, champagne, and cardboard boxes, with rising demand for lipstick, instant noodles, used clothing, and mini liquor bottles; other signs cited are lower hemlines, increased law-school applications, and reduced restaurant spending. Economists define recessions by measurable indicators such as mounting unemployment, declining industrial production, and short-term rates rising relative to long-term rates. The National Bureau of Economic Research determines recessions as significant, economy-wide declines lasting more than a few months.

Read at The Atlantic