5 Interesting Economic Indicators You Can Use to Determine Economic Health….
The amount of public and private data released and utilised to create economic reports is immense. From employment rates to GDPs to manufacturing statistics, the data is endless but there are also some other unique and far more interesting ways to look at the data around us, to interpret the current state of the economy. Here, we detail 5 interesting economic indicators that mostly are informed by consumptive spending habits but when analyzed might tell us a little bit more about our economic health.
1. Men’s Underwear
Like it may suggest, an increase in demand for men’s underwear suggests a country’s economic health is positive or potentially an economic boom is underway, conversely, a decline in sales suggests the opposite. This is based on the theory supported by the former head of the US Federal Reserve, Alan Greenspan, that men will reduce their purchasing of new underwear when concerned about finances and instead choose to use their old pairs. The next time you’re in the department store, a lack of men’s underwear/all of them being sold out might actually be a great sign.
2. The Champagne Index & the Consumer Consumption Beer Index
Champagne = Celebration! So, in this case, a rise in purchasing of champagne demonstrates a link to growing economic wealth. This consumption pattern is likely linked to consumers indicating if there is sufficient spending for luxury or expensive items. This also goes hand in hand with the Consumer Consumption of Beer Index, as consumers attempt to tighten their budgets, they reduce the frequency and spend at pubs. During the Global Financial Crisis, in Europe, employment within the Beer industry fell by 12% compared to Europe’s employment as a whole which only fell by 2%.
3. Alligator Population Index
Alligator skin is used for luxury handbags and shoes, therefore a decline in sales for these items can act as an indicator of the lack of purchasing power consumers have. In fact, alligator farms in 2009, following the Global Financial Crisis, encountered extreme losses and many farms in Louisiana faced solvency issues, as the alligator skins they were harvesting had no demand in the market.
4. Baby Diaper Rash Indicator
This index shows that during economic difficulties, parents with children who require diapers attempt to cut back on how frequently they change their child’s diaper within a day. According to Symphony IRI’s findings, diaper rash cream sales increased by 2.8% while conversely, the sale of disposable diapers reduced by 8%, which might suggest a recessionary period looming.
5. Garbage Indicator
Individuals spend and therefore consume at far greater capacities when their wealth rises. The garbage indicator is used as a predictor to demonstrate that more garbage and trash is likely a show of a booming economy. Not only an indicator for economic health, but it might also assist in providing metrics and data for consumer spending habits and how to encourage sustainable consumption.
References:
https://www.unacast.com/post/recession-2022-foot-traffic
https://startuptalky.com/most-unusual-economic-indicators/
https://financialpost.com/business-insider/the-40-most-unusual-economic-indicators
