Cardboard Boxes Are Not the Usual Recession Indicators, But Are All About Consumer Psychology
When the economy starts to wobble, economists pore over the big dashboards: GDP growth, unemployment rates, inflation. But sometimes, the first red flags come from somewhere stranger.
In his Monday Morning Economist blog, Virginia Tech economist Jadrian Wooten points to the so-called cardboard box index, first introduced by former Federal Reserve Chair Alan Greenspan. Because more than 75 percent of non-durable goods in the U.S. ship in cardboard boxes, tracking their production can reveal something about future demand. According to Wooten, box makers have lately been scaling back, with nearly 9 percent of domestic capacity set to shut down.
“If they’re cutting back, it’s likely because orders are shrinking,” he said in a statement. Which means: fewer boxes, fewer goods moving, shakier economy.
But cardboard boxes are just one of many unconventional signals people have leaned on to spot downturns. Economists have long played with quirky, pop-cultural recession indicators that mirror consumer psychology, sometimes reflecting the bigger picture.
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Do Lipstick, Underwear, and Hemlines Indicate Recession?
Some of the most enduring “recession metrics” live in the beauty aisle. The Lipstick Index claims that when wallets tighten, people shift from expensive luxuries to small indulgences. Nail polish, high heels, or skincare sales are often lumped in as well: affordable treats that soothe in hard times.
Greenspan had another favorite: men’s underwear sales. Since underwear is an invisible, replace-only-when-necessary item, a dip suggests men are postponing even the most basic purchases. Fashion takes it further with the Hemline Index, which argues that skirt lengths rise with optimism and fall with pessimism.
None of these is a precise science, but together they capture a mood: when uncertainty looms, consumers mix restraint with little flashes of comfort or conservatism. What looks like lipstick, briefs, or skirt length is really stress management in disguise.
Studying Psychology of Choice During Recessions
Beyond these pop-cultural tales, actual studies reveal broader and more consistent behavioral shifts. When recessions hit, fear and uncertainty drive consumers to sharpen their focus on essentials. A 2019 study conducted by researchers from the Universidade Nova de Lisboa, Portugal, summarizes that shoppers switch to cheaper options, lean on private labels, and hunt for promotions. They also shop more often, buy smaller amounts, and organize better to avoid spoiling food or overspending.
But even in frugal times, people chase value. They search for acceptable quality at the lowest possible price, fueling growth in products that offer affordable luxury. On the other side, cars, home appliances, and vacations are delayed, while grocery sales often hold steady or even rise.
Capturing Real-Time Consumer Confidence
So do quirky indicators like lipstick sales or underwear really predict recessions? Not reliably. Natural social shifts, like evolving beauty standards, can scramble the data. And unlike hard stats, these measures are too anecdotal to anchor policy or business planning.
But they can be useful in another way. They reflect how people feel before traditional economic indicators catch up. A rapid dip in underwear purchases or rising numbers of lipstick sales may not forecast GDP, but they can capture real-time consumer confidence, stress, and coping behavior.
At their best, these cultural metrics offer a psychological barometer, showing how groups react to uncertainty. In that sense, quirky recession indicators aren’t about boxes, lipsticks, or hemlines at all. They’re our habits, fears, and the small comforts we cling to when the world feels unsteady.
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