Cardboard boxes are not the usual recession indicators, but are all about consumer psychology
When the economy begins to vacillate, economists look at large dashboards: GDP growth, unemployment rate, inflation. But sometimes the first red flags come from a foreign place.
In his Monday morning economist Blog, the economist of Virginia Tech Jadrian Wooten underlines the so-called Cardboard box indexIntroduced for the first time by the former president of the Federal Reserve Alan Greenspan. Given that more than 75% of unsustainable goods in the American ship in cardboard boxes, monitoring their production can reveal something on future demand. According to Wooten, the manufacturers of boxes have recently reduced, with almost 9% of the interior capacity that stops.
“If they reduce, it is probably because orders decrease,” he said in a statement. Which means: fewer boxes, less goods that move, the more fractive economy.
But cardboard boxes are only one of the many unconventional signals that people have relied on to identify slowdowns. Economists have long been playing with original pop-cultural recession indicators that reflect consumers’ psychology, sometimes reflecting the situation as a whole.
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Do lipstick, underwear and hems indicate the recession?
Some of the most sustainable “recession” live in the alley of beauty. THE Lipstick index Affirms that when wallets tighten, people go from expensive luxury to small indulgences. Nail polish, high heels or skin care sales are also often grouped: affordable treats that soothe in difficult times.
Greenspan had another favorite: sales of underwear for men. Since underwear is an invisible article, replaced only, anything, a DIP suggests that men even postpone the most basic purchases. Fashion goes further with the Hem index, Who maintains that skirt lengths increase with optimism and fall with pessimism.
None of these elements is a precise science, but together, they capture a mood: when uncertainty is looming, consumers mix the restraint with small lightnings of comfort or conservatism. What looks like lipstick, briefs or the length of the skirt is really the management of disguised stress.
Study the psychology of choice during recessions
Beyond these pop-cultural tales, real studies reveal broader and more coherent behavior changes. When recessions reach, fear and uncertainty push consumers to refine their concentration on essential elements. A 2019 study by researchers from the Nova Universidade de Lisboa, in Portugal, sums up that buyers pass to cheaper options, rely on private labels and hunt promotions. They also buy more often, buy smaller quantities and organize better to avoid spoiling food or spend too much.
But even at the frugal era, people continue the value. They are looking for acceptable quality at the lowest possible price, fueling the growth of products that offer affordable luxury. On the other hand, cars, household appliances and holidays are delayed, while grocery sales often hold stable or even increase.
Capture consumer confidence in real time
So, do original indicators such as lipstick sales or underwear really predict recessions? Not reliably. Natural social changes, such as the evolution of beauty standards, can blur data. And unlike hard statistics, these measures are too anecdotal to anchor business policy or planning.
But they can be useful in another way. They reflect what people feel before traditional economic indicators are caught up. A rapid drop in underwear purchases or an increase in the number of sales of lipsticks may not predict GDP, but they can capture confidence, stress and consumer adaptation behavior in real time.
To their best, these cultural measures offer a psychological barometer, showing how groups react to uncertainty. In this sense, original recession indicators do not concern boxes, lipsticks or hems at all. These are our habits, our fears and our little comforts to which we hang on when the world feels unstable.
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