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Unexpected Connections: 10 Oddest Economic Indicators

        Money | Economic Concepts

10
Lipstick vs. Nail Polish
The 'lipstick index' supposedly means that when lipstick sales increase, the economy is worsening but it has not proved to be always true. BananaStock/Thinkstock
The 'lipstick index' supposedly means that when lipstick sales increase, the economy is worsening but it has not proved to be always true. BananaStock/Thinkstock

When the economy tanked during the 2001 recession, cosmetic company Estée Lauder saw a significant boom in lipstick sales. Its former chairman, Leonard Lauder, dubbed it the "lipstick index," explaining that women seek out cheap "luxuries" when money is tight [source: Wolverson].

Turns out that Lauder was half right. Women do splurge on cheaper treats when the economy is weak, but fashion trends are another strong influence. During the Great Recession, for example, lipstick sales fell with the rest of the economy in 2008, but nail polish sales went through the roof, up 65 percent from 2008 to 2011 [sources: Davidson, Wolverson].

The longer the recession, though, the weaker the relationship between down markets and "pick-me-up" sales. As the economy continued to limp along in 2013, U.S. perfume and nail product sales flattened and even declined as Americans cut back further on discretionary spending [source: Ng].


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