Speaker 1: Welcome to stuff Mom never told you from housetop works
Speaker 1: dot com. Hey there, and welcome to the podcast. I'm
Speaker 1: Kristen and I'm Molly. Molly got some bad news for
Speaker 1: you today and stay that we are recording. According to
Speaker 1: the New York Times and probably every other major newspaper
Speaker 1: out there, February, unemployment rates are out and it has
Speaker 1: reached another high eight point one percent. And that is
Speaker 1: not growth that we like. Things are looking grim out there,
Speaker 1: So I gotta ask you, has your spending change to
Speaker 1: reflect this recession? You know, people are trying to pinch
Speaker 1: pennies ride the wave. What are you doing well? I
Speaker 1: have to admit I haven't been in in a shopping
Speaker 1: mall since Christmas. Um probably no more Starbucks once my
Speaker 1: gift card runs out that I got for Christmas. Um
Speaker 1: less seating out altogether. Yeah, me too. I've been cooking
Speaker 1: a lot more rice. Best Christmas present I got this year,
Speaker 1: Rice cooker. It has saved my life. Christen dorses rice cookers, Ding.
Speaker 1: Maybe you'll get a freedom. But Christine, we're not the
Speaker 1: only ones cutting back. I saw in the Washington Times
Speaker 1: last week, uh that the big winner in the recession
Speaker 1: be surprising to you Granny underwear really yes, apparently, um,
Speaker 1: like myself, many women are not going to the mall.
Speaker 1: And Victoria's Secret stock is way down when we're scrimping
Speaker 1: on nice bras, nice panties and Haynes stock, which you
Speaker 1: know makes you know, I don't want to point fingers
Speaker 1: at Haynes, but not as classy maybe as Victoria's Secret
Speaker 1: is rising a little more cotton. There's nothing wrong with cotton.
Speaker 1: That's a discussion for another podcast, indeed, But all over
Speaker 1: the market you see trends where department stores, boutique stores
Speaker 1: there their earnings are way down, and stores like Ross,
Speaker 1: t J, Mac Martials their stock is rising. Yeah, and
Speaker 1: even on the higher end. Um. We had New York
Speaker 1: Fashion Week last week, and um, I think Paris Milan
Speaker 1: Fashion Week. I obviously am not the biggest fashionista, but
Speaker 1: a few stories caught my eye about you know, people
Speaker 1: were trying to see if there are any signs of
Speaker 1: this the recession on the runway, and there was definitely
Speaker 1: a lot more black and exaggerated lines, sort of this
Speaker 1: whole power silhouette of big shoulders, balloons, sleeves, um and
Speaker 1: not much risk taking, right, I think with Slate who
Speaker 1: said that clearly designers think that if we dress with ferocity,
Speaker 1: will beat the recession with shoulder pads. Well, we'll see,
Speaker 1: we'll see if that happens. But um, it seems kind
Speaker 1: of silly though, to be even thinking about fashion when
Speaker 1: there's so much economic trouble, like it, really, I don't know,
Speaker 1: it seems kind of silly, right, But um, fashion and
Speaker 1: granny panties and all of that is kind of does
Speaker 1: reflect the economy because it's all part of consumer spending.
Speaker 1: It's discretionary spending, things that we don't necessarily have to have,
Speaker 1: like we have to make mortgage payments and have to
Speaker 1: pay for our car insurance and all of that. But these, um,
Speaker 1: these smaller items also reflect the economists also pay attention
Speaker 1: to how we're treating these smaller items. And well, have
Speaker 1: you ever heard of the hemline Index? I have because
Speaker 1: I read your fascinating article what is the lipstick indicator?
Speaker 1: But you start off with this thing called the hemline index,
Speaker 1: which really shows how fashion and the economy are inextricably linked.
Speaker 1: In uh round. Right before the Great Depression kicked off,
Speaker 1: an economist named George Taylor noticed that women's fashions had changed.
Speaker 1: It seemed like once the stock market crash in twenty nine,
Speaker 1: women's headlines fell because if you remember, in the roaring twenties,
Speaker 1: women were being a little more daring, showing a little
Speaker 1: more skin with your shore skirts. Flapper is don't mean
Speaker 1: to love them. Um. And so Taylor devised this thing
Speaker 1: called the hemline index, and he theorized that when the
Speaker 1: market rose, so did hemlines, and when they dropped, skirts
Speaker 1: fell to the floor. And it pretty much held out
Speaker 1: for a few decades. What you noticed, right, and then, um,
Speaker 1: you point out that in the eighties, looking and a
Speaker 1: woman's hemline might have seemed a little sexist and a
Speaker 1: little bit little unnecessary. It probably stopped holding up. So
Speaker 1: economists needed something else to point to, but it was
Speaker 1: still fashion. They started looking at men's ties, neckties. If
Speaker 1: a man was wearing a skinny tie, it meant that market.
Speaker 1: It was bowl market. Things are good wide ones declining
Speaker 1: bear market. Right, But this is all still tied to
Speaker 1: fashion turance, because you know, skinny ties a little a
Speaker 1: little more hip in the UH in the eighties, so
Speaker 1: you know, but this isn't the only thing that economists
Speaker 1: have tossed around like trying to look for correlations between
Speaker 1: everyday habits and the economy. Some have used the amount
Speaker 1: of snowfall on Christmas Day in Boston to predict the
Speaker 1: market for the coming year. UM, images of bears or
Speaker 1: bulls on major magazines like Time. Um, even the Super
Speaker 1: Bowl outcome has been used. I mean, these guys aren't
Speaker 1: really completely depending on it. They're not staking all of
Speaker 1: their all of their claims on you know, snowfall and
Speaker 1: super Bowl. But they're out there. But one interesting thing
Speaker 1: that maybe ladies should be particularly interested in is um
Speaker 1: this idea that we can predict female consumer confidence by
Speaker 1: a very simple thing, and that's whether we're buying lipstick. Yeah, Molly,
Speaker 1: I myself am not a lipstick purchaser, nor am I
Speaker 1: I think I have one too, but I've had since college. Right,
Speaker 1: But I will say, my mom isn't. I don't think
Speaker 1: I've ever seen my mom without lipstick. Oh no, yeah,
Speaker 1: I mean there were you know, sometimes money was tight
Speaker 1: growing up, but anytime she left the house, she always
Speaker 1: pull out and reapply, get some lipstick out. Oh yeah,
Speaker 1: And you know, maybe I'm not a lipstick ware but
Speaker 1: there are times when you know, things might be tough.
Speaker 1: I can't buy all that i'd like to buy it Target,
Speaker 1: but a little tube of vanilla chapstick might make me
Speaker 1: feel better. Yeah. So once again it sees little discretionary items,
Speaker 1: little litill pick me ups along the way, and consumer
Speaker 1: spending all goes into this thing called the Consumer Confidence Index.
Speaker 1: And this is something more than you know, super Bowl
Speaker 1: and snowballs, snowfalls, excuse me, that economists really do pay
Speaker 1: attention to. And the Consumer Confidence Index, which is compiled
Speaker 1: by the nonprofit Conference Board, measures how confident we are
Speaker 1: we as in you and me, average Joe in the market.
Speaker 1: Because if we don't think the market is going to
Speaker 1: rebound much, we're going to be more compelled to say
Speaker 1: we're not going to put much more money into the market.
Speaker 1: So if confidence is low, economists are going to take
Speaker 1: that as a cue that it's going to take a
Speaker 1: little longer for the market to rebound because there's not
Speaker 1: going to be as much um money coming into it,
Speaker 1: and vice versa. So I guess one way they contract
Speaker 1: this is look at our discretionary spending. Things we don't
Speaker 1: need but we buy anyway. Right, Like, when the economy sours,
Speaker 1: people are going to buy more non perishable foods Like me.
Speaker 1: I've been buying lots of brown rice and canned vegetables,
Speaker 1: lots of beans on my table now. But when we're
Speaker 1: back in the black, it's time for fresh meat, fresh vegetables,
Speaker 1: baked goods, little you know, a little better, better fair restaurants,
Speaker 1: Lord Willing someday. But this all comes back um too.
Speaker 1: You know, we were talking earlier about the hemline index,
Speaker 1: but one thing that sort of escaped those depression era
Speaker 1: economists was that at the same time that hem lines
Speaker 1: were rising and falling uh in the depression, lipstick sales
Speaker 1: cosmetic sales were rising. Yeah, and there are also spikes
Speaker 1: during one, right, mollyh With the two thousand one dip
Speaker 1: following the September eleven the tax, the chairman of Essay
Speaker 1: Lauer Companies, man named Leonard Lauder, picked up on a
Speaker 1: spike in lipstick sales. He found that in the fall
Speaker 1: of two thousand one, lipstick sales jumped eleven percent. So
Speaker 1: he got to thinking, well, maybe you know, women don't
Speaker 1: have enough money right now to splurge on a new wardrobe,
Speaker 1: so they're coming to the estate ladder counter and they're
Speaker 1: buying up more lipsticks to give a little little touch
Speaker 1: of color to those old, drab clothes that they're still
Speaker 1: having to wear. So he coined the term lipstick indicator.
Speaker 1: So basically, what you're saying is if I'm at the
Speaker 1: mall and I can't afford a new purse, that just
Speaker 1: the little tube of lipstick is going to make me
Speaker 1: feel better two purse, thirty dollars tube of lipstick or
Speaker 1: for me more like five dollars. That still seems for
Speaker 1: But another reason why you know, little things like lipstick
Speaker 1: and cosmetics might go up in in down economies is
Speaker 1: that you get an instant gratification from it. You have
Speaker 1: to reapply your lipstick. You get to dig through your
Speaker 1: purse and find that shiny new you know, Chanel ruby red,
Speaker 1: whatever color it is, and you know, open it up,
Speaker 1: put it on, and then kind of get a refreshing
Speaker 1: every now and then. Right, it lasts longer as opposed
Speaker 1: to splurging on like a latte, which I might do
Speaker 1: every down, then that's gone. But lipstick, it's your friend,
Speaker 1: stays with you for as long as that colors and style.
Speaker 1: That is, if you if you wear lipstick unlike me
Speaker 1: or Molly. So we might not be experts on this,
Speaker 1: but we may not need to be because in this
Speaker 1: recent recession, lipstick is down, Like the lipstick indicator is
Speaker 1: not holding up as being the sign of you know,
Speaker 1: how the markets doing. Yeah, the economists charted out the
Speaker 1: gross domistic product and lipstick sales from to two thousand
Speaker 1: one and pretty much, uh put a smack down on
Speaker 1: the lipstick indicator. They were like, there is no parallel
Speaker 1: between the two. I mean, it's one of those things
Speaker 1: like the skinny ties we're talking about. It's probably just
Speaker 1: all it's all fashioned because you know, you've got lip glosses,
Speaker 1: it might be more popular or whatever, right, which is
Speaker 1: actually why, um, some experts are saying that maybe there
Speaker 1: might be an index which one day is a little
Speaker 1: bit more applicable to Kristen and me because they're saying
Speaker 1: we should actually just track all beauty products and not
Speaker 1: just lipstick because, as you said, lipstick is very tied
Speaker 1: to what's in style. Um, you know there have been
Speaker 1: years where I was doing well even though you know,
Speaker 1: the economy was doing well, it wasn't a very good
Speaker 1: indicator anymore. Right, It's not very reliable and in as
Speaker 1: an example of why an overall beauty index might be
Speaker 1: a little more reliable. Um. In two thousand and eight,
Speaker 1: Laureale posted a year of a year year sales growth
Speaker 1: of five point three percent. And that's pretty good. I mean,
Speaker 1: I don't know many companies right now that are enjoying
Speaker 1: such robust growth, right And if you need a new job,
Speaker 1: the number of new Avon representatives rose five percent, as
Speaker 1: did their revenue in the same time periods that you
Speaker 1: were talking about with Floreale. So perhaps the new index
Speaker 1: will be something like the blush index, the eyeliner index,
Speaker 1: or just the makeup index. Yeah, I mean, and you know,
Speaker 1: economist they're gonna be looking for that because they they've
Speaker 1: got to have their cute statistics. But molly, um side note,
Speaker 1: guess what's come back to along with the lipstick indicator
Speaker 1: from two thousand and one. But there's a new necktie index.
Speaker 1: What is it? Well, um, this is from London. Some
Speaker 1: economists think that more men are buying neckties and sort
Speaker 1: of like neckties or the men's lipstick, they're buying more
Speaker 1: neckties to make themselves feel a little a little better
Speaker 1: in the office and uh, look more professional, to keep
Speaker 1: their jobs, But Molly, sadly enough, it is yet another
Speaker 1: indicator that times are tough. Times are tough. More rice
Speaker 1: is ahead in your future. At least I've got my
Speaker 1: rice cooker because I have no patience for waiting for
Speaker 1: water to boil. Well, if there any sponsors out there,
Speaker 1: I don't have a rice cooker, I'd love one. I'll
Speaker 1: bring you rice, Molly. But if you want to learn
Speaker 1: more about both rice cookers and recessions, you can go
Speaker 1: to how stuff works dot com. And if you'd like
Speaker 1: to email Kristen or me with any suggestions, ideas, or comments,
Speaker 1: you can email us at mom stuff at how stuff
Speaker 1: works dot com for moralness and thousands of other topics
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