Yes, you read that right. Sales of men's innerwear and women's lipstick are some of the unconventional economic indicators, besides common factors such as Gross Domestic Product (GDP) and jobs. The Men's Underwear Index (MUI) is an unconventional economic indicator that tracks men's underwear sales to gauge consumer confidence and economic trends. 

Advertisment

The term was made popular by former Federal Reserve Chairman Alan Greenspan. It is based on the idea that men tend to cut back on non-essential purchases, like new underwear, during economic downturns. 

Also read: Repo Rate Hits 6%: What You Must Know Before FD Returns Shrink Further

What are the basic principles behind this? 

Advertisment

Firstly, underwear is a basic necessity, and its sales typically remain stable during normal economic times. Secondly, when economic uncertainty rises, men may defer buying new underwear, indicating reduced discretionary spending. Thirdly, changes in underwear sales can precede shifts in the broader economy, making it a leading indicator. 

If you think all of this is silly, then believe it or not, the MUI has shown surprising accuracy in reflecting economic trends. For example, men's underwear sales declined significantly, mirroring the economic downturn during The Great Recession (2007-2009). The sales gradually increased, indicating rising consumer confidence during the post-recession recovery (2010-2012). Also, the sales initially declined but later rebounded as consumers focused on comfort and self-care during the COVID-19 Pandemic (2020). The men's underwear market was valued at $7.38 billion in 2024, a slight increase from $6.99 billion in 2023. 

Also read: ‘Blame China, not Trump’: Piyush Goyal says Beijing’s malpractices created global trade imbalance

Advertisment

There are limitations, of course

As already mentioned, MUI is an unconventional indicator and there are limitations despite the fact that it offers insights into consumer behaviour. Notably, MUI is not a standalone indicator and it should be used in conjunction with other economic indicators for a comprehensive understanding. 

MUI is also influenced by various factors, meaning the sales can be affected by factors like changing consumer preferences, fashion trends and global events. 

Also read: How the stock market was born: The first IPO, tradeable shares and their surprising India connection

In a social media post last year, Nikhil Kamath, Zerodha co-founder, mentioned MUI as he weighed in on spotting a recession before mainstream media headlines it. 

In his post, he said, "Markets were up ~16 percent this financial year, now they are up ~6 percent. 6 percent is a lot, that's not why we are posting this, but thoughts?"

Women's lipsticks

Meanwhile, women buy more and more lipsticks because they are relatively inexpensive accessories (one tube from an average company costing anywhere from $5 to $20). The sale of lipstick can also determine the status of the economy. When women cut back on more expensive beauty goods like makeup and perfume, it means the money if tight. Hence, When lipstick sales increase as luxury beauty item accessories decrease - a clear sign of economic headwinds. 

As per Statista market insights, the lipstick market reached $22.17 billion in 2024, up from $21.16 billion in 2023. In his post, Kamath mentioned how Estee Lauder's Lipstick Index pointed to recessions, with an 11% increase in lipstick sales during the fall of 2001. 

Also read: Market crash didn't stop THIS billionaire from doubling his wealth

Astrology and hair dyes are also among other Unconventional Economic Indicators. Here's the list of some of the popular ones: 

1. The Big Mac Index compares the price of a Big Mac across countries to estimate purchasing power parity (PPP). 

2. The Latte Index tracks the price of a cup of coffee to monitor inflation and consumer spending.

3. The Hemline Index observes the length of women's skirts to predict economic trends (e.g., shorter skirts indicate a booming economy).

4. The Sock Index tracks sock sales to monitor consumer spending on non-essential items.

5. The Beer Index compares beer sales across regions to estimate economic activity and consumer spending. 

(With inputs from agencies)