Wednesday, June 10, 2009

Mixed signals for the "underwear indicator"

During a recession, underwear is among the first things that people stop buying—because hardly anybody actually sees them, CNBC reports. This creates pent-up demand, and so when underwear sales level off and increase, it should signal an uptick in consumer demand.

According to the underwear indicator, an old favorite of Alan Greenspan, there needs to be a return to 2 to 3 percent annual growth in sales in order to claim a recovery.

However, consumer research group Mintel predicted underwear sales will see a continuing decline of 2.3 percent this year and no recovery until 2013.