What lipstick says about our economy
Add Axios as your preferred source to
see more of our stories on Google.
/2022/11/14/1668463932011.gif?w=3840)
Illustration: Aïda Amer/Axios
For decades, investors and others have looked for economic clues in less obvious places such as the length of women's hemlines and the sale of lipstick.
- The idea is that lipstick sales remain resilient during downtimes because people want to treat themselves to small, less costly indulgences.
- But the truth of that adage may be fading.
Driving the news: High inflation, rising interest rates, tech layoffs, the ongoing Russia-Ukraine war and dire warnings from business leaders like Jeff Bezos are fueling fears of recession. But this time those concerns are not leading to a boom in impulse buys, according to Bloomberg.
- Nervous and jittery consumers are making fewer purchases on a whim this year, according to McKinsey & Company.
- In the U.S, there was a 2.1% drop in sales of face care items in the 12 months leading up to Oct. 1 compared to a year earlier, NielsenIQ reports.
The intrigue: But even with the waning of the so-called lipstick effect, the hemline index may still hold true. The "hemline index" was posited in the 1920s by a Wharton Business School economist who noted that skirts became shorter when markets were up and longer in downturns.
- Longer skirts and looser, baggier pants are making a comeback this year, according to The Gauntlet.
- "It is not so much that longer hemlines signal economic downturn," author Nazeefa Ahmed wrote. "Rather, longer hemlines signal society’s reaction to bad news. We require security, a sense of comfort, and find this with looser, more conservative styles."