First, let us recall the original out there leading economic indicator, the men’s underwear index. In good times, men tend to buy new underwear. In bad times, they hold off on that. The hot waitress economic indicator is similar. But first, let us review our basic research.
This economic index is almost as old as lipstick itself, which Charles Revson (a founder of Revlon) helped launch when he would visit hair salons and show off red nail polish by adorning his own nails, and yeah, maybe, he put lipstick on now and then. A guy has to make ends meet somehow, right? Anyway, lipstick and nail polish have been wildly popular in the Amazon Rain Forest (look it up) and elsewhere for about 60 years. It was not too long after girls in Rio started sporting glossy red lips that economists discovered the lipstick economic index. In hard times, ladies will invest in cheap cosmetics, like lipstick, and sales go up. In rugged economic eras, like during stock market crashes, ladies become aware that their bottom line doesn’t look so good, so they like to add makeup to hopefully attract a good provider. This is the theory that is used to understand why sales of cosmetics go up in bad times.
This runs a bit counter to the lipstick index, and is perhaps not well understood, yet, it is well known that hemlines will drop almost overnight after a stock market crash. The 1930s were a classic example. Girls wore long skirts right up to and through the bobbysoxer era. Then, in the boom boom go go 1960s, hemlines went up, just like the stock market. When the Dow is up, so are ladies skirts. For some reason, these things happen. Perhaps, in a depression or recession, girls decide to go on interviews, and their mothers recommend that they avoid those alluring miniskirts. Guys will continue to study this issue, obviously.
Leading or lagging economic indexes
These are mixed issues, and I can’t say I understand the difference. But if I see a lot of miniskirts, I’m buying, but if they drop, I’m selling.
Hot waitress index
This is a new index, something that Wall Street economists and waitresses themselves tend to be astounded by. Surely, the Labor Department should take notice. Anecdotal evidence is there. One waitress commented: “They slowly let the boys go, then the less attractive girls, then all of a sudden these hot girls showed up, like, out of nowhere.” Yes, the hot waitress index is this: the hotter the waitress, the weaker the economy.