• 28
  • April
    2011

In gauging the slowdown and eventual end of the economic recession, analysts use many indicators to assess whether economic recovery is actually occurring. For example, an increase in new home sales means that the housing market is recovering, a dip in the unemployment rate means that employers have started hiring again, and a decrease in bankruptcy filings means that debt is no longer insurmountable for many people.

While some predictions of the recession's end may seem to be jumping to conclusions, there is some nugget of accuracy buried within each. That may not be the case for the latest prediction, which came from financial reporters at CNBC last week. According to the report, the sales of underwear are on the rise, which means that the recession may be on its way out.

According to the report, sales of shares of undergarment manufacturers such as Hanesbrands, Maidenform, Limited and Warnaco have seen a steady increase in recent months. Analyst Michaell Yoshikami says that any consumer spending indicates recovery. "There is a cyclical recovery," he said. "It does suggest that the economy is recovering and consumers are spending more money."

Retail analyst Eric Beder is slightly more skeptical, stating that underwear may not be a true indicator of the recession's end. He says that Americans continued to buy undergarments throughout the recession as a way to treat themselves, and that underwear purchasing never really went out of style. "People still wanted to spend money," he said. "So they could spend money on underwear if they were feeling good about themselves, even though for most people they wouldn't show that off."

Whether underwear will save us from the recession remains to be seen, but it is true that consumer confidence is a sign of good things to come.

Source: CNBC, "Underwear Sales Are Rising. You Know What That Means" Margo D. Beller, 21 April 2011