How men's underwear sales can predict economic recessions and recovery

Around the world, some of the biggest experts on the economy are focused on men’s underwear sales. 

Yes, this sounds absurd, and no it is not an indication of a common hobby amongst economists.

Instead, it relates to something known as the Men’s Underwear Index. This is something that’s based on an observation people have made throughout recent history. The shorthand is that, when men’s underwear sales drop, it indicates a recession could be on the way. Conversely, when sales are up, it points to economic recovery. 

As bizarre as this seems, it’s actually one of the best uses of consumer behaviour to predict the state of the economy. The big question is…how? How is there a link between the sale of men’s underwear and economic recovery or downfall? When you look further into things, it kind of makes a lot of sense. 

The most essential garment

You can argue that underwear is the most essential garment for men. It’s something you pretty much have to buy - and you will need to replace over time. Consequently, the sales records of men buying underwear tend to remain pretty stable. If these records suddenly decline, it can potentially indicate an economic recession. 

Why? Because men are struggling with their finances to the point where they are no longer replacing their underwear. If it gets to this point, there must be a true economic downturn on the horizon. 

By contrast, if men’s underwear sales start to increase again and reach a stable rate, it shows that an economic recovery is on the cards. Men are finally able to buy underwear again - hallelujah! 

Historic data backs this up

The above argument might seem purely anecdotal. However, there is evidence to back up these claims. For instance, during the Great Recession in the early 2000s, reports came in that men’s underwear sales declined significantly throughout this period. 

What happened as the economy started to recover? That’s right, sales of men’s underwear started to rise yet again. 

Currently, we’re in the midst of a pretty poor economic period. There isn’t a recession right now, but the men’s underwear index could hold the key to predicting if things will get worse or not. Likewise, many economists are keenly studying these sales to see if there is an upward trend. If underwear sales start to increase and gain momentum, it’s such a good factor in showing an economic recovery. 

It may sound like the strangest theory you’ve ever heard, but it’s a brilliant indication of how consumer behaviour can predict trends. With something like men’s underwear sales, you have a really stable market that barely fluctuates unless there’s a problem. If men struggle with their income and earnings, these sales fall, and a recession is typically expected. It is wonderfully ironic that amidst the doom and gloom of an economic downfall, some of the brightest financial minds in the country are firmly focused on men’s underwear!