10 weird, wacky, and surprisingly real recession indicators
Hey, $mart parents 💡
Bring money lessons home with Greenlight’s $mart Parent newsletter, a quick read with impactful tips — delivered free to your inbox weekly.
Key takeaways
Economists have fancy tools for predicting recessions like GDP reports, unemployment rates, and interest charts that only experts actually read. However, some of the most surprisingly accurate signals come from things like lipstick sales, hemlines, and even underwear.
It turns out the economy shows up in unexpected places, if you know where to look. These ten indicators offer a look at how money and everyday behavior are more connected than you might think.
10 unusual recession indicators
Recession is what happens when there’s a significant decline in economic activity across most sectors that lasts more than a few months. When predicting an actual recession, economists analyze concrete, serious metrics like unemployment benefit claims, consumer confidence, and manufacturing data.
Looking at factors such as lifestyle changes and pop culture trends to predict an economic downturn is a lighthearted way to cope with the financial anxiety and concern that a real recession could be on the horizon. Instead of slogging through complex economic data, check out the following tongue-in-cheek, but possibly real, recession indicators.
1. The lipstick index
The lipstick index is rumored to have started when Leonard Lauder, former CEO of makeup company Estée Lauder, noted that lipstick sales rose after 9/11.
The lesson
The theory is that when there’s a recession, people cut back on big luxuries and treat themselves to small, affordable treats that feel special but don’t break the bank. It shows us how companies look at sales by connecting them to the broader world.
#1 family finance and safety app.
2. The hemline index
This is the theory that dress hemlines go up during economic prosperity and down when there’s a downturn. This theory was hatched in 1926, when most women wore stockings. The idea is that in good times women could afford new dresses and showed off their silk stockings, while in lean times they wore longer skirts to hide that they weren’t wearing stockings.
The lesson
Theories like this endure because they are fun and occasionally line up. Like most pop economics, it’s more fun than reliable, but it may have sparked a whole tradition of looking for recession signals in unexpected places.
3. The men’s underwear index
While underwear is a basic necessity for most people, it’s easy to postpone replacing. When sales of underwear dip, it signals that households are cutting even the smallest non-urgent purchases.
The lesson
It teaches kids the difference between “I need this now” and “I can wait” and that millions of people making that same small decision adds up to a measurable economic signal.
4. The Big Mac index
A Big Mac is made the same way everywhere, so comparing its price across the world reveals whether currencies are fairly valued or over/undervalued. While not technically a recession indicator, the theory hinges on the idea that in a perfectly efficient world, identical goods should cost the same everywhere once exchange rates are accounted for.
The lesson
A dollar doesn’t go the same distance everywhere in the world. It’s a tangible way to understand why exchange rates and global trade actually matter in everyday life.
5. The cardboard box index
Almost everything that gets made gets shipped in a box, so cardboard production tracks industrial activity. When orders for shipping boxes fall, factories are slowing down before the official numbers show it.
The lesson
Supply chains are closely connected, and sometimes the best signal of a big problem is a small, unglamorous one. It’s important to look at the less obvious things when wondering why something is happening.
6. The Waffle House index
Waffle House has a legendary reputation for staying open through disasters, so when one closes, responders believe that the economic situation is genuinely severe.
The lesson
Reliability and consistency are a form of value, and sometimes a private company’s behavior tells you more about a crisis than an official report does.
7. The Super Bowl indicator
Original NFL franchises winning correlates historically with a good market year, while AFL-origin teams winning correlates with a down year.
The lesson
This is a blatant example of a shaky or nonexistent correlation. Humans are wired to find patterns, even where none exist.
8. The Google Trends index
When people start searching terms like “how to file for unemployment” or “recession proof jobs” in numbers that are larger than usual, it often precedes official economic data confirming a downturn.
The lesson
What people search for privately is a window into what they’re actually worried about, and real-time data can sometimes see around corners that traditional statistics miss.
9. The restaurant index
Dining out is one of the first things households cut when budgets tighten, so falling restaurant sales are an early signal of consumer stress.
The lesson
This helps us understand the difference between discretionary and non-discretionary spending and why businesses selling “wants” feel recessions faster than those selling “needs.”
10. The used car index
When used car prices rise sharply, it can mean consumers are trading down from new cars or supply is constrained. Either way, some believe it reflects pressure somewhere in the economy.
The lesson
Prices aren’t random. They hold valuable information. Learning to ask “why did this get more expensive?” is one of the most useful economic habits we can build.
What every family should know about recessions
Recessions can feel scary and confusing, especially when you’re hearing about them on the news but don’t have much context. Here’s what’s worth understanding.
Recessions are normal. They’re a regular part of the economic cycle, not catastrophic failures. The US has had around 35 official recessions, two almost-depressions, and one depression since the mid 1800s, and it has recovered from every single one. Understanding that downturns are temporary helps people make calmer decisions instead of panicked ones.
Prices tell stories. When something gets more expensive, it’s never random. There’s always a reason, whether it’s a drought, a shipping delay, or too many people wanting the same thing. Teaching kids to ask “why did this cost more?” builds real economic intuition.
Jobs and spending are connected. When people lose jobs, they spend less. When they spend less, businesses make less money and may cut more jobs. This feedback loop is how a small problem can snowball and why governments try to intervene early.
Saving is a superpower in a downturn. Families with emergency savings have options during a recession, while families without them have fewer. This is one of the most concrete arguments for why saving money now, even small amounts, is crucial.
Not everyone experiences a recession the same way. Some industries shrink while others grow. For example, healthcare, discount retail, and repair services usually do fine. Some families feel a downturn immediately, while others barely notice. The economy doesn’t happen to everyone equally. Rather, it’s millions of different stories at once.
Teach money skills for life
The best economic minds in the world still can’t predict exactly when a recession will hit or how long it will last, but they do pay attention, and so can you. When kids track their own spending, set savings goals, and start to connect their choices to outcomes, they’re building the same instincts these indexes are based on, just on a smaller scale.
Greenlight, the #1 family finance and safety app, gives families the tools to pay attention, have real money conversations, and build habits that hold up in any economy.
Start building those habits and sign up for Greenlight today.
Share via
