Quirky fashion-related recession indicators are all the rage

I don’t go out much lately, but every time I’ve been outside, I’ve noticed that spotting a “recession indicator” is trendy as talk of the cost of living seems to pepper every conversation. From what I and others wear — my preference for formal pants lately — it seems many see “recession indicators” everywhere. The fact that I prefer staying indoors is a recession indicator, as a few people I know have suggested. I have other reasons for staying indoors (age and sobriety, among them), but they are not entirely wrong that the cost of socialising is chief among them.

This game of spotting poverty signifiers (for lack of a better term) could be a spillover from online chatter that has been filled with theories about a looming recession. You may have heard about the lipstick index — a theory that suggests that a spike in the sales of lipstick and other affordable, “feel-good” beauty products signals an economic downturn.

It’s among several popular theories on TikTok and other corners of the internet about a looming recession, but many other similar, sometimes weird, indicators populate online discourse. Expect these theories to spike as the world tries to become familiar with a new layer of economic uncertainty brought about by the current US administration’s tariffs on trade partners that has ignited a trade war.

It has also dramatically improved the chances of a global recession, as many economists are now warning. Similarly, fashion commentators on TikTok are using everything from the lipstick index to skirt length and necktie styles to predict a recession — theories that are as slippery as the credibility of said commentators, but have nonetheless proven true in many instances.

The hemline index

From the 1920 there has been a clear correlation between skirt length and economics. The Roaring 20s is an era defined by a period of prosperity in the Western world. Jazz was blossoming, and the flapper aesthetic was in style. Skirt lengths were getting shorter, and young people were openly flaunting disdain for the prevailing codes of decency, as well as social and sexual norms. This preceded the stock market crash of 1929, which was very quickly followed by an almost overnight switch to longer, more modest skirt styles, typically mid-calf or just below the knee. This prevailed throughout the 1930s as men in the Western world went to fight in World War 2, and women entered the workforce. As the economy strengthened after the Great Depression, skirt lengths once again decreased in length, giving us the famed miniskirt by the mid-1960s as the Western world experienced an economic boom, decreased unemployment and increased wages.

Necktie style

This theory posits that men wear more conservative necktie styles — less adventurous colours and slimmer style — in times of economic depression as a way of appearing more responsible and therefore employable. Wider, bolder styles indicate economic recovery.

Men’s underwear sales

Alan Greenspan, former chair of the US Federal Reserve, observed in the 1970s that the sales of men’s underwear were an economic indicator. The New York Times reported: “Sales rose steadily in normal times, but tended to dip when men had less money, or were trying to cut back on spending.”

The newspaper quoted Bill Paterson, then an analyst with research firm Mintel, as saying in 2009, during the Great Recession, that underwear sales would fall 2.3%. “It’s simply a bellwether. When people are feeling confident, they spend more. The last thing you’re going to do when you’re short on cash, is go and replace your underwear.”

It’s a theory that held true in 2009, and again in 2020 as the world faced a pandemic.

The world has changed quite dramatically since the 1920s, and even since the Covid-19 pandemic. The lipstick index didn’t hold true in 2020, for example, probably because we were all wearing masks. But there are certainly signs of restraint in fashion that are reflected in recent trends, such as quiet luxury and its emphasis on basics, as well as quality over quantity. We’re also seeing a return to minimalist fashion and muted tones, perhaps most prominently epitomised by the selection of mocha mousse as Pantone’s colour of the year for 2025. It demonstrates a desire for timeless style. That, too, is perhaps a recession indicator.