Reversecowgirl69 has been dancing for six years in clubs from Texas to New York. The graduate student and stripper tracks her income carefully, and in May 2022 she noticed it dropping: “I was noticing that there were just fewer higher-earning people coming into the club, and when that happens, you know something bad is going to happen.” She tweeted a warning: “The strip club is sadly a leading indicator and i can promise y’all we r in a recession lmao.”
The tweet went viral, and at least within her club, it seemed to be correct. Over the next few months, her earnings continued to plunge, and the other workers at the club said the same. By December – usually an excellent month for strip clubs – business “was abysmal”, and, she says, her income that month was down by half compared with the same time last year. “It was bad for everybody. I know girls who dance in Vegas and even they weren’t making money. They’re like the oracles we consult, and if Vegas girls aren’t making money, no one’s making money.”
This is an unusual economic moment. In the US, the unemployment rate remains at 3.4%, the lowest in a half-century, yet interest rates remain higher than they’ve been in decades. GDP grew 2.5% last year, although many economists expect it to be much slower this year.
In unusual times, experts often look beyond traditional metrics like GDP growth, job numbers or manufacturing activity and search for hidden signals of a downturn. The idea is that people change some of their most private behaviors as recessions approach – sometimes in unconscious and mysterious ways – and uncovering enough of these shifts might reveal leading indicators, or simply confirmations, of a broader economic slump.
Of these hidden recession signals, perhaps the most well-known is the so-called “lipstick effect”, a theory first proposed by the economist and sociologist Juliet Schor in 1998. Schor found that women bought more lipstick during economic downturns while cutting back on more expensive luxury products: “They are looking for affordable luxury,” she wrote, “buying ‘hope in a bottle’.”
All of my Asian friends and I have transitioned back to our natural hair color from being fully-fledged platinum blondes. This means we’re about to go into a recession
— Trinh Q. Truong (@trinhqtruong) February 2, 2023
The idea gained traction in 2001 when Leonard Lauder, the chairman of Estée Lauder, reported that more customers were buying lipstick despite the post-9/11 recession. “When lipstick sales go up, people don’t want to buy dresses,” he told the Wall Street Journal at the time. But the lipstick index hasn’t held up during the pandemic; sales plunged as people wore masks and stayed inside.
Alan Greenspan, the former federal reserve chair, tracked another unconventional indicator: men’s underwear. Greenspan theorized that during tough economic times, people would wait longer to replace worn-out items – and men might wait the longest to swap out their underwear, the most private items we own. If Greenspan was right, we could be in trouble: industry research shows the men’s underwear market slumped during 2022, and the men’s briefs manufacturer Hanesbrands’ stock sits at just 50% of its price one year ago.
A more contemporary indicator might be found in online dating apps, which also perform well during downturns. “During recessions people stay at home more; they don’t want to pay and go to bars. They’re going online to meet each other,” said Markus Frind, the chief executive of the dating site Plenty of Fish, amid the slump in 2009. That appears to be the case again today. In November 2022, Match Group, which owns Tinder and Hinge, reported a 2% increase in paying subscribers across its brands, with a 7% jump for Tinder alone.
Recently on social media, some people have pointed to other new indicators, like the number of people giving up on their blond-dyed hair, nicknamed “recession brunettes”. Maintaining a high-quality salon dye treatment can cost as much as $200 a month – a tough ask when money’s tight. The fashion site the Cut recently published a guide for readers who can’t afford to see their colorists this year. As a 25-year-old recession brunette told Business Insider last week: “I was looking in the mirror and looking at my bank account and I was like: ‘There’s no way I’m going to be able to get it done anytime soon.’”
But some indicators could be even more mundane. The economist and software executive Tony Nash tells me he opened the fridge at his shared office this week and realized there was no room to put his tuna fish sandwich. That was a far cry from a few months ago, when the office was nearly as full, but the fridge was luxuriously empty. He had started bringing his own lunches a few months earlier to save money, and if his workmates were now doing the same, he wonders, could the office fridge’s occupancy be a recession indicator?
It’s kind of a joke, but also not. He used to direct the Economist’s global research business, he says, and “I’ve seen really dumb economic indicators put together all the time. So I love to make close little observations like that because they’re as relevant as people believe them to be. I can look at government data as much as I want, but the stuff that really matters is what I see in front of me.”
So are we in a downturn or not? It depends on your vantage point. Reversecowgirl69 tells me that despite her disastrous December, there was a stunning turnaround in January. “I’ve danced for six years, danced through a pandemic, danced in multiple states, and I’ve never heard anybody say that January is better than December in my whole life. Like, that’s unheard of,” she says. She’s seeing signs across multiple indicators that give her hope: more customers buying bottles, more rooms being booked. “Maybe,” she says, “the recession is slowing.”
