Another Quirky Indicator Signaling Trouble Ahead

I’ve previously noted that the hemline indicator and the nail polish indicator are signaling trouble ahead for the U.S. economy. A Yahoo! Finance report, “Women’s Dress Sales Suggest Recession: Schoenberger,” highlights another quirky indicator that is sending the same message.

Since consumer spending is said to account for some 70% of GDP, it’s not unusual for analysts to lean on shopping data to gauge the U.S. economy. Todd Schoenberger of the reduces that strategy even further by using expenditures on just one product as his tell. That product? Women’s dress sales.

“Go back to 1980; anytime the month over month number (in women’s dresses) actually declines it has served as a proxy that there is a slowdown that heads into a recession for the U.S. economy,” Schoenberger asserts with jaunty confidence in the attached video.

Why women’s dresses? “The logic is this: the woman of the household tends to be be the accountant of the household. She’s going to take care of little Johnny, maybe get a class picture outfit from Gymboree and then spend the money on herself… if you’re not seeing women buying stuff for themselves you know the husband isn’t going to do anything.”