Economist Says Underwear Sales Predicts Nation’s Economy’s Well Being

November 24, 2014  |  

Alan Greenspan, former chairman of the Federal Reserve believes underwear can tell us a lot about the economy.

How, you may ask?

During the 1970s, Greenspan developed his own consulting firm and he says he observed a connection and even developed a theory: underwear sales remain stable in regular economic times and decrease when the economy declines. Although some people may believe this theory is a fluke, two underwear companies in the underwear industry are proving this theory strong. According to USA Today, Hanes Brand’s third quarter report revealed double digit sales and profit growth. At the end of that same quarter, net sales sky rocketed to 17 percent earning $1.4 billion. Hanes Brand adjusted operating profit also increased 23 percent, grossing $217 million.

In a press release, Richard A. Noll, Chairman and Chief Executive Officer of Hanes Brand shared: “Our business continues to perform very well, particularly in an uncertain consumer environment, We have delivered more earnings in the first three quarters of 2014 than we did all of last year.” The lingerie industry is also seeing sales take new heights. The company L Brands that owns and operates Victoria’s Secret, PINK, Bath & Body Works, La Senza and Henri Bendel noted their net sales grew seven percent year-over-year to $2.32 billion.

Although Greenspan’s theory may be a strange indicator,  statistics show as the economy stabilizes and expands at a 3.5 percent annual rate, underwear sales have been at its highest since 2003. We find it interesting shoppers don’t purchase new underwear when the economy plummets, since the undergarment is a basic necessity. It also reveals the priorities citizens have during tough economic times.

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