• U.S.

Recovery for Real?

3 minute read
Josh Sanburn

Economists often cite job losses and stock performance to assess the state of the economy. But boxer briefs? It’s not as crazy as it sounds. Because underwear buys are so steady, even a small drop could signal a major downturn. “We should’ve known something was rotten when sales stopped cold [in 2009],” says Marshal Cohen, head retail analyst at NPD Group. Good thing underwear is rebounding–alongside beauty salons, mobile homes, cable TV and other surprising sectors that forecast a real recovery.

Underwear 6.6%

Yearly sales jumped 6.6% in 2011. PROGNOSIS: Great! According to the Underwear Index–an economic principle championed by Alan Greenspan–a sales uptick in household staples like boxer briefs is a likely sign that consumers have stopped penny pinching.

Pay TV 0.2%

Cable and satellite subscribers were up 0.2% in the last quarter of 2011.

PROGNOSIS: Decent! Even amid the rise of cheaper streaming options like Netflix and Hulu Plus (each $7.99 per month), Americans are still spending $50 to $100 a month on pay-TV packages–a signal that we’ve got some discretionary income.

Golf 21.4%

Rounds played increased 21.4% in January over the same month in 2011.

PROGNOSIS: Good! The uptick spans public and private courses, suggesting it’s not just the rich who are willing to shell out.

The tooth fairy 17%

Per-tooth payouts dropped 17% last year, to $2.10.

PROGNOSIS: Uh-oh! The downturn doesn’t bode well for kids–or parents who feel compelled to cut costs. But according to the nonprofit Delta Dental, the tooth fairy is “hopeful for a recovery this year.”

Beauty salons 5.4%

Sales grew 5.4% over the past two years.

PROGNOSIS: Great! In downturns, most Americans do away with pricey hair gels, creams and cuts. The massive turnaround–34% of salons say they’ve hired employees in the past two years–puts us back at prerecession spending levels.

Eating out 8.7%

Annual sit-down-restaurant sales ticked up 8.7% in January over the same month in 2011.

PROGNOSIS: Good! More diners at full-service eateries–as opposed to fast-food joints, which thrive during recessions–is a strong sign that we’re back on track.

Mobile homes 30%

In December, 3,800 units shipped, up 30% from the month before.

PROGNOSIS: Good! Yes, mobile homes are cheap. But strong trailer-park sales may signal stronger overall housing numbers soon, says Nicholas Colas, a strategist with ConvergEx Group.

SPENDING

The Young and The Penniless

Consumers ages 18 to 34 have been marketing’s sweet spot since the 1960s. But in the wake of recession, their spending power is quickly evaporating–which should give advertisers pause. “If [young adults] have no money in their pockets, there is nothing to sell to them,” says Sunil Gupta, head of the marketing department at Harvard Business School, noting that wealthy, retiring baby boomers are capturing more attention.

TODAY’S YOUNG ADULTS ARE … 54%

NOT WORKING

Percentage of Americans ages 18 to 24 with a job–an all-time low that has fallen faster than proportions for other age groups since 2007

LIVING AT HOME

1 in 5

Americans ages 25 to 34 living in multigenerational households, roughly double the rate in 1980

RELUCTANT TO PAY 70%

Percentage of adults ages 18 to 29 who have pirated music and movies, compared with 46% of all adults

OUTPACED BY THEIR PARENTS ONLINE 150%

Growth in social networking among Web users over 65; in the past two years, social networking has plateaued among 18-to-29-year-olds

–ANDRA FORD

Sources: NPD Group; Bernstein Research; National Golf Foundation; Delta Dental; U.S. Census Bureau; Bureau of Economic Analysis; Sageworks; Bureau of Labor Statistics; Pew Research Center; the American Assembly at Columbia University

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