Economic modelling may not sound like TikTok material, but Gen Z has found a way to make it relevant. On social media platforms, particularly TikTok, the hashtag #RecessionIndicators has been gaining traction, turning consumer habits into economic forecasts.
The phenomenon is hardly new. In fact, it is a digital revival of much older economic theories. One of the most famous is the “Lipstick Index,” coined in the early 2000s by Estée Lauder executive Leonard Lauder. He argued that during financial downturns, consumers tend to skip big-ticket purchases but still seek affordable luxuries, such as lipstick.
A similar idea is the “Men’s Underwear Index,” popularized by former U.S. Federal Reserve chair Alan Greenspan. He observed that men often delay buying new underwear during economic hardship, resuming purchases when financial conditions improve.
Today, Gen Z has added its own twist. Searches for “recession indicators” spiked on Google this summer, while TikTok users point to the popularity of Labubu dolls—quirky, monster-like plush toys priced under €30—and the rise of minimalist beauty trends as signals of economic slowdown.
These affordable indulgences, some argue, reflect consumers cutting back on larger purchases while seeking small joys.
“People do look for smaller, affordable treats when they’re hard up for money,” explained Cathrine Jansson-Boyd, professor of consumer psychology at Anglia Ruskin University. “But these indicators are limited. They only cover specific segments of the population.”
Still, brands are taking note. Launching smaller, more affordable product ranges during financially difficult times not only helps boost sales but also attracts younger consumers early, potentially building long-term loyalty. Marketing strategies often adjust accordingly, emphasizing affordability and value while resonating with consumer anxieties.
Another frequently cited indicator is the “Hemline Index,” introduced in 1926 by economist George Taylor. It claimed skirts rise in prosperous times and lengthen in recessions. However, modern research shows little correlation.
Economist Philip Hans Franses of Erasmus University, who studied fashion magazine archives, described the theory as more “urban legend” than reliable metric, though he noted weak delayed effects at times.
Professional economists remain cautious about placing too much weight on quirky cultural signals. “Measuring recessions, let alone predicting them, is very tricky,” said Andrew Kenningham, chief Europe economist at Capital Economics. “Even the definition of a recession varies across countries.”
More traditional tools include business surveys, consumer sentiment trackers, and the inverted yield curve — a bond market phenomenon often seen as a reliable harbinger of downturns.
For economists, TikTok’s #RecessionIndicators may lack scientific rigor, but that doesn’t mean they’re meaningless. Sebastian Franke, consumer economist at ING, noted that while such signs are anecdotal, they do highlight shifts in behavior that brands and policymakers cannot ignore.
Ultimately, quirky indicators like lipstick sales, plush dolls, or skirt lengths may not replace hard data. Yet they reveal something deeper: how people cope with uncertainty, find comfort in small purchases, and collectively turn economic anxiety into cultural commentary.
As Franses put it: “They did this in medieval times too. People looked for patterns and meaning in trends. TikTok is just the modern version.