Spending on snacks, underwear, small liquor bottles and flights are just some of the odder economic measures that are used to determine the health of the economy.
While many will turn to the stock market or employment rate, they aren’t the only indicators experts will use. There are some more, well, odd, areas professional and air-chair economists will track to see if it indicates consumers are pulling back on their discretionary spending, which means a recession could be impending.
With President Donald Trump’s new tariffs expected to increase consumer prices, federal workforce cuts expected to contribute to unemployment and a dwindling stock market, talks of a potential recession are swirling.
Economists define a recession as a “significant decline in economic activity” across the market that lasts for more than a few months. Often, they look at real income, unemployment, industrial production, retail sales and GDP to determine this.
As of now, economic analysts believe the economy is stable, though they predict slower growth this year. Goldman Sachs has indicated the odds of a recession this year are approximately 20 percent.
But there are also smaller patterns to look out for to predict a recession. Here is a look at the big, small and odd factors that can indicate a recession:
Declining men’s underwear sales
Known as the “men’s underwear index,” the decline in sales of men’s underwear is an indicator of economic downturn.
The theory, which was followed by former Federal Reserve Chair Alan Greenspan, assumes that people treat men’s underwear purchases as discretionary spending for their households and, therefore, purchase less of it during economic recessions.
Men – who have a stereotype of wearing underwear until it literally falls apart – are slow to buy new pairs, to begin with, so in a recession, they will purchase even less.
High unemployment rate
When the three-month average of the national unemployment rate is 0.5 percentage points or more above the low over the last year, it’s an indication of a recession – something more commonly known as the Sahm rule.
The current unemployment rate is 4.1 percent – higher than this time last year but lower than it was in Q4 of 2024.
Less snacking
Rising grocery store prices force customers to be more selective about the food they buy, which means purchasing fewer indulgent snacks such as dips, nuts, rice cakes, jerky and more.
U.S. convenience store sales volume fell by 4.3 percent as prices rose in the year, market research firm Circana found.
More specifically, Chocolate candy dropped in sales volume by 6 percent while refrigerated produce dropped by 7 percent.
Abundance of cigarettes
Seeing cartons of cigarettes on the gas station shelf indicates that consumers are spending less on unnecessary products as they look for ways to cut costs in their lives.
While cigarettes are a product that are not often impacted by recession – as indicated by sales during the 2008 Great Recession- smokers will opt for cheaper options.
More smokers are purchasing a single pack of cigarettes over a carton of cigarettes, the Wall Street Journal cited from the National Association of Tobacco Outlets.
Inverted yield curve
A sign that the economy is slowing down is when investors become more concerned about the future of the economy rather than the present and begin investing more in long-term bonds.
This can drive up the price of long-term bonds, thus lowering their yield – or the return an investor receives each year as a bond matures.
Typically, short-term bonds have lower yields than long-term bonds. In this situation, the yield curve “inverts,” – thus signaling that an economic downturn may occur. But an inverted yield curve does not always signal a recession.
Increasing sales in small liquor bottles
Increased sales of miniature liquor bottles, often referred to as “airplane bottles” or “nips,” may be a sign that consumers are trying to cut costs.
Sales of 50-milliliter bottles of whiskey and tequila are up, makers of the alcohol told the Journal. The smaller bottles are cheaper than bigger counterparts – but are often more expensive per ounce.
“It’s a consumer that is pinched,” Lawson Whiting, the CEO of the Jack Daniel’s maker, Brown-Forman, told the Journal.
Consumers may purchase smaller bottles of European made wine or champagne as well after Trump threatened to impose 200 percent tariffs on the goods.
In an economic downturn, people tend to purchase more gold as it’s seen as a safer investment compared to stocks and bonds.
Gold prices crossed $3,000 for one ounce for the first time on Friday.
