Economic indicators, such as the length of hemlines, and their influence on the economy
The Conference Board, a global, non-partisan, non-profit think tank founded in 1916, provides trusted economic insights and data. This esteemed organisation is known for publishing important economic indicators, including the Leading Economic Index (LEI) and the Coincident Economic Index (CEI).
The LEI, a valuable tool for forecasting turning points in the business cycle, combines ten independent leading indicators. These components include manufacturing hours, unemployment claims, new orders, building permits, stock prices, credit indexes, interest rate spreads, and consumer expectations. The CEI, on the other hand, reflects the current state of the economy and is comprised of payroll employment, personal income, sales, and industrial production.
The Federal Reserve Bank of Philadelphia, another significant player in the economic data arena, produces regional economic data and releases monthly coincident indexes for all 50 states. However, the pandemic's impact on unemployment numbers led to the suspension of these leading indexes for all states in April 2020. Consequently, the Federal Reserve Bank of Philadelphia's analysis became inappropriate for predicting the economy's next move.
Intriguingly, there are some unconventional economic indicators that offer insights into consumer behaviour during economic fluctuations. For instance, the so-called "Underwear Index" theorizes that men will replace their old underwear in economic good times and hold off during economic decline. Another interesting observation is that sales for "affordable luxury" items, such as lipstick, may increase when a recession is looming.
Moreover, during economic decline, people may turn to online dating sites seeking connection and comfort. This shift in behaviour suggests that while economic conditions may be challenging, the human need for companionship remains a constant.
The Conference Board's comprehensive suite of economic indicators continues to serve as a valuable resource for economists, policymakers, and businesses alike. As we navigate the current economic landscape, these insights offer a beacon of understanding in these uncertain times.
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