The new economic indicators

You know we’re near the depths of recession when men’s underwear is used to gauge the nature of the economy.

The Washington Post says the economy, apparently, is turning around:

Here’s the theory, briefly: Sales of men’s underwear typically are stable because they rank as a necessity. But during times of severe financial strain, men will try to stretch the time between buying new pairs, causing underwear sales to dip.

“It’s a prolonged purchase,” said Marshal Cohen, senior analyst with the consumer research firm NPD Group. “It’s like trying to drive your car an extra 10,000 miles.”

It’s a theory first publicized by former Federal Reserve chairman Alan Greenspan with NPR science correspondent Robert Krulwich.

Other consumer staples have been variously portrayed as the coalmine canaries of the economy:

Lipstick – The theory was that when times are hard because women who cut back on clothing purchases will turn to buying lipsticks for a relatively inexpensive pick-me-up, according to the Wall St. Journal.. It’s a theory, however, that has now been dismissed.

Cardboard boxes — Makes sense, right? If people are buying things, more cardboard boxes need to be produced. Earlier this month, industry analysts said cardboard box sales have risen to a level not seen since last October.

Scrap metal prices — Greenspan was fond of tracking scrap metal prices, the Wall St. Journal said, because it indicated higher industrial production. Prices have risen only slightly over the last year, but the indicator may not be valid this year since Cash for Clunkers is flooding salvage yards with scrap metal.

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