Recession Is Easing - Check Your Underwear

Readers, this week tends to be one of the slowest of the year. Half of the working world — including policymakers — is on vacation, and those that aren't are counting down the hours to the last good weekend of summer (a three-day weekend in America). It's difficult to find things to write about.

Which means that this is the week newspapers dig into their trivia grab bag, and come out with things like this:

For one answer to the nation's most pressing economic question -- when will the recession end? -- just take a peek inside the American man's underwear drawer.

There may be some new pairs there, judging by recent reports from retailers and analysts, and that could mean better days ahead for everyone.

Here's the theory, briefly: Sales of men's underwear typically are stable because they rank as a necessity. But during times of severe financial strain, men will try to stretch the time between buying new pairs, causing underwear sales to dip.

"It's a prolonged purchase," said Marshal Cohen, senior analyst with the consumer research firm NPD Group. "It's like trying to drive your car an extra 10,000 miles."

Some have been watching this index all recession long. Now, their patience is finally being rewarded:

Sears (SHLD) spokeswoman Amy Dimond said stores are beginning to see more sales. At Target (TGT), spokeswoman Jana O'Leary said sales of men's underwear have been stronger over the past two months and multi-pair packs are moving.

When the multi-pair packs are moving, you know better times are ahead.

This article originally appeared on The Economist.com

Comments

[kbear2:]

Not sure about the rationale. I should think that there would be a greater need for new underwear after experiencing the financial freefall of the past year. ;-)

Sep 01 05:16 AM

[Burton A. J...:]

You neglected to discuss the serious problem of label placement on men's underwear.

As a boy, I always knew that the label on a pair of Jockey Shorts was on the inside, i.e., skin-side, of the upper elastic border of the back of the shorts. That is, one never had any doubt about which way the shorts went on one's body.

Nowadays, however, manufacturers have taken to putting the label on the outside of either/or the front and back, and in extreme cases on the inside of the front. A few diabolical manufactures actually place labels on both the inside and outside of the front and/or back.

I still can differentiate the front of my torso from the back, but I am uncertain as to which side of the shorts goes where because of the exceptionally confusing placement of the label. The seemingly random label placement certanly couldn't significantly cut manufacturing or distribution costs, and it's hard to imagine that it's in response to consumer demand.

In the interests of supporting mental health, I hope the pending Obamacare health legislation addresses this problem. It claims to have a cure for everything, except suckers, but it went unmentioned in the first 385 pages. I just couldn't read anymore.

Burton A. Johnson, JD,MD
bajvalueinvesting.com
Burton A. Johnson, MD, JD
bajvalueinvesting.com

Sep 01 03:48 PM

[Ed Zimmer:]

It could be that underwear purchases were put off during the crash (about six months ago) and have finally worn out, forcing men to purchase. The fact that they are buying in bulk may be fear that they won't be able to afford underwear in the foreseeable future, or have a store to buy them at. Or as others suggest, it could be the tidy whities are no longer white after recent developments and future possibilities. Another green shoot? I don't think so.

Sep 02 10:57 AM

[TeresaE:]

Two things to note:

1. How many of these purchases were done by people that used to buy their undies at Needless Markup or Macy's? The fact Sears sales are increasing does not bode well for the economy as a whole if the purchasers were former designer label buyers.

2. Now the million dollar question, are the sales with cash or credit?

If on credit, I would surmise people are using the last of it prior to not paying the bill. New laws allow for the forfeiture of property, no bank is going to take your used undies.

For some reason there is a huge disconnect between the reality I am looking at and the musings of the reporters and "consultants", government employees or academia's finest writers. .

Nah, I'm sure those with regular paychecks understand the formerly working man and the struggles he is facing.

Sure they do.

Sep 02 11:37 AM

[bricki:]

On the other hand it is a positive sign that people think that they can afford underwear of some sort and at least won't be forced to go commando.

Sep 02 04:22 PM

[ETFdesk.com:]

Retailers look enourmously overvalued. Personal income is down 5% or so from this time last year and the only modicum of growth in spending has come on the heals of huge gov. incentive programs ie clunkers and the 1st time home buyers credit. They are enough to provide some slight up turns in housing figures and maybe positive print in Q3, beyond that it looks like the only thing that can only be done by that huge 70% chunk of GDP which is consumer spending. And that doesnt seem very plausible. If you need more reading on the subject see a number of great articles on deflationary environment ....

Cut my pay ... please! ; www.etfdesk.com/headli...
Unemployment: The Harder You Look, The Uglier It Appears From Naked Capitalism ; www.etfdesk.com/headli...
First Time Home Buyer NAR Numbers : www.etfdesk.com/headli...

etfdesk.com
Research ETFs. Post , Read, Track Macro Investment Ideas.

Sep 02 07:49 PM

[Griller:]

"When the multi-pair packs are moving, you know better times are ahead" But how far ahead? And are these sales perhaps merely the result of "mishaps" of the nervous bowels of the upper classes?

Sep 02 08:58 PM

[mightywurli...:]

Better get it while it's cheap folks. After the Bernanke/AIG/Citi/Obama inflation apocalypse, BVDs and bullets are going to be about the only the only investments worth anything.

Disclosure: Long Underwear

Sep 03 01:15 AM

[daniel3582:]

I was reading elsewhere that "they" were looking for alternate ways to measure GDP, such as a correlation between GDP and light fixtures seen in satellite imaging.

I'm sure we can find a way to measure GDP using underwear purchases...

Sep 03 06:12 AM

[Chaser12:]

This is good news if your an optimist and bad news if your a pessamist.Just like all news, it depends on your outlook on life.

Sep 03 07:43 AM

[wheelbarrel...:]

LMFAO - OK so bankruptcies are up 24% but we have definitely "turned the corner" because of an uptick in underwear sales? Talk about grasping for green shoots - wow.

Sep 03 07:52 AM

[Tom Armistead:]

This got me thinking about Nike (NKE), the thinking is, you could go a little while longer before you buy new running shoes, but the soles wear out so eventually replacements must be bought. Or, if they're being used as dress sneakers, there would be the appearance issue.

So underwear looking up might be good for athletic footwear.

Sep 03 10:57 AM