How is the economy doing? Look in your underwear drawer

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It looks like 2009 was a bad year for men's underwear. Mintel, a consumer research firm, says that sales of men's skivvies dropped 2.3 percent from 2008. Meanwhile, NPD Group, another firm, argues that the decline was more on the order of 12 percent. Either way, it's a fair bet that many underwear drawers are looking a bit ragged.

Some analysts refer to this economic measure as the "underwear index." While seasonal outerwear, flashy luxury clothes, and women's lingerie are often tied to seasons or holidays, men's undies tend to be pretty straightforward. They are replaced as needed, which means that their sales should remain relatively constant.
In this context, 2009's drop in the sales of men's underwear means that many men are walking around with busted elastic, fabric that has worn thin, or a much-reduced stock of spare BVDs. Given the difficulty of getting a few extra months out of a pair of boxers, it suggests that many men are reaching the end of their easily-absorbed cutbacks. After all, while eating out less or taking fewer trips can be a minor annoyance, wearing tired underwear or -- worse yet -- going commando suggests that consumers are truly caught on the horns of a financial dilemma.

While an unusual measure of the economy, the underwear index is reportedly one of Alan Greenspan's favorite statistics to consult. Part of its significance probably lies in the possibility that, for many men, buying underwear is largely unconscious. When asked about the state of his underclothes, one consumer (who chose to remain nameless) stated, "Actually, I'm running out. I don't know how it happened." He went on to note that he has been cutting back on some expenses. As the drop in underwear sales continues, it seems to be shifting from an unconscious to a conscious trend; in the process, it is becoming increasingly significant, as consumers deliberately sacrifice comfort for cash.

The underwear index is a lagging indicator, and the delay between finances and Fruit of the Looms is most likely measured in weeks, not hours. Even so, skivvy sales highlight the links between Wall Street and (the underwear drawer on) Main Street, demonstrating the macro effects of changes in everyday micro spending.

This connection can have unforeseen effects: for example, in addition to delaying underwear purchases, many men seem to be switching from boxers to jockey shorts: According to Mintel, sales of briefs are rising 0.6 percent against sales of boxers. While not particularly large, this number is significant, as underwear preferences are not easily changed. Part of this shift is likely a measure of price: on the Hanes (HBI) website, a seven-pack of BVDs costs the same as a two-pack of boxers. And in my experience, briefs usually last longer than boxers.

If one looks at history, however, a different interpretation emerges. According to the Jockey underwear company, its iconic briefs first hit stores in 1935, during the height of the Great Depression. Despite financial misery, lack of disposable income, and a massive blizzard, Marshall Fields' Chicago store sold out its entire stock before noon on the first day of release. Under the circumstances, one has to wonder if economic uncertainty brings out the daredevil in some consumers. To put it another way, does an empty bank account push consumers to -- as it were -- put it all out there?


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