Fact or fiction? How These Fashion Trends May Be Indicating a Recession
- Aastha Makkar
- Jun 3
- 6 min read
Skeptical? I was too. Because how can Fashion Trends possibly indicate a recession? It's almost as alien as trying to find a credible link between universal healthcare and America - it doesn't exist. And yet, economists, fashion historians, and curious cultural observers have noticed strange, stylish patterns that seem to sync up with the economy. From skirt lengths to men's underwear, these curious fashion clues suggest our wardrobes may be tracking the economy more closely than we are.
The Hemline Index
Developed in the 1920s by economist George Taylor, the Hemline Index suggests that skirt hemlines or lengths rise and fall with the stock market or gross domestic product (Bitter, Snodgrass & Hartmans, 2025). In boom times, hemlines rise (hello, mini skirts); and during downturns, they drop to the floor (hello, maxi everything). But is it fact or fiction?
According to Baardwijk & Franses (2010), data analysis dating back to January 1921 suggests that the Hemline Index lags behind the economic cycle by three years. This explains why (despite a rise in economic prosperity) floor-length skirts were trending in 2011, even though the global financial crisis of 2008 was seen 3 years prior (Legka, 2013).
Backing up this idea, economists also point to fabric costs and availability as influencing skirt lengths: “In boom times, when producers typically charge more for their yarn or textiles, designers would make skirts shorter to cut costs.” (Legka, 2013).
And so, I wonder - could it be that Gen Z’s longer hemlines are a subtle nod to economic anxiety or just the gospel according to Skims?
Men's Underwear Index
Yes, you read that right, the Men’s Underwear Index is a real thing. Allegedly. The idea - made popular by former Federal Chair of the United States, Alan Greenspan - is that men will stretch their undies' supply to the absolute limit during tough economic times (Stewart, 2008). When money’s tight, buying new boxers just doesn’t make the cut. It’s strange. It’s oddly personal. And somehow, it kind of makes sense. If people aren’t even replacing their boxers, it’s safe to assume luxury spending isn’t looking great either.
Of course, skeptics argue this theory has more holes than the underwear it's tracking. Sales could fluctuate due to seasonal discounts, trend shifts (hello, boxer briefs supremacy), or a sudden TikTok trend convincing everyone that going commando is cool again. Still, it remains a surprisingly popular reference point in economic circles - possibly because it’s hilarious, slightly awkward, and just relatable enough to stick.
So, is it science or just a case of too many economists staring at laundry baskets? Hard to say. But if you ever needed another reason to check your boyfriend’s sock drawer, now you have one.
The Lipstick Index
When times get tough, people apparently still want a little luxury - just the affordable kind. Leonard Lauder of Estée Lauder noticed that lipstick sales often spike during economic downturns, suggesting that when bigger splurges (like handbags or vacations) are off the table, people reach for small indulgences instead (Nelson, 2001, Legka, 2013). But what happens when the world stops wearing lipstick altogether? Not because of frugality, but because no one’s leaving the house (or taking off their mask) long enough to need it?
At the height of the pandemic, lipstick felt almost ridiculous; a relic from another life, like heels or hugging. Who were we trying to impress? The sourdough starter? But as the world slowly shuffled back to normal, so did our desire for small, familiar rituals. By late 2020, lipstick sales were quietly rising, like a collective sigh of, “Maybe I’ll feel human if I wear MAC again” (Navia, 2025). It wasn’t about beauty, really. It was about routine. Control. And the oddly comforting illusion that everything might be okay - if we just picked the right shade.
The Big Bag Theory
This theory suggests that in times of economic prosperity, small bags rule - but in tougher times, big bags make a comeback. Why? For one, they’re incredibly practical. Suddenly, it’s not just about style but function - carrying everything from lunch, snacks and work essentials to side hustle gear and existential dread. If your bag’s started to look more like a weekend getaway companion than a delicate accessory, maybe your finances are trying to tell you something. It’s not just a bag; it’s a quiet nod to doing more with less, and carrying on regardless.
Recession Blonde
There’s a new way to read the room when it comes to money, and it’s written in your roots. The “Recession Blonde” (or brunette) isn’t just a hair trend; it’s a quiet rebellion against the expense of keeping those golden strands immaculate. Letting your natural colour grow through might look like a careless ‘old-money blonde,’ but really it’s just a hack in trying to save cash in an uncertain economy. Because, honestly, keeping blonde hair bright isn’t a walk in the park, it’s a full-on production, and one that doesn’t come cheap (Noble, 2025).
I remember my blonde phase like it was a rite of passage. The whole “brown girl goes blonde balayage” moment that set me back $700, plus another $120 on purple shampoo and conditioner just to keep the brassiness at bay. It was glamorous, exhausting, and honestly, a bit unsustainable. So when I recently chopped half my hair off and switched to a more natural and lived-in honey brunette, it wasn’t just a style choice, it felt like an economic survival tactic. The whole “recession blonde/brunette” thing? Yeah, it’s very real for me.
And it’s not just about colour. Shorter hairstyles (AKA the Japanese Haircut Indicator) have quietly become the haircut of choice when wallets tighten (The Economic Times, 2022). Long, luscious locks are lovely, but they demand time, money, and salon visits; luxuries that start to feel frivolous when you’re watching your spending. It’s practical, low-maintenance, and a little bit rebellious; like saying to the economy, “You won’t break me, but you might make me cut my hair”. Because sometimes, the length of your hair tells a story far greater than just style.
Recession Chic or Cyclical Fashion?
Like so much online chatter, the idea of recession indicators in fashion can sometimes feel a bit over the top. Sure, trends like officewear making a cyclical comeback or peplums popping up again might not predict the economy, but they’re interesting shifts to watch (Criales-Unzueta, 2025). Here are a few style movements that often come up in conversations about changing times:
Rise in Minimalism: Simplified, pared-back styles often gain popularity during economic downturns as people opt for timeless, versatile pieces over fast trends.
Increase in Corporate Officewear: The “office-to-club” look sees a comeback, blending polished workwear with evening-ready details — reflecting a focus on multifunctional wardrobes.
Peplums Making a Comeback: This classic silhouette can offer a sense of structure and confidence, which may appeal during uncertain times.
Slim Silhouettes: Leaner, more tailored cuts suggest a move towards efficiency and restraint, mirroring a cautious economic mood.
Fashion Forecast: Slightly Anxious With a Chance of Recession
Whether or not we’re actually heading into a recession in 2025 is still anyone’s guess; economists are squinting at graphs, the rest of us are squinting at our bank balances. But fashion, knowingly or not, seems to be bracing itself. Brands are already feeling the sting of a luxury slowdown, and the way we’re dressing - quieter, simpler, cheaper - suggests that our wardrobes are reacting before our governments do.
Sure, the sudden obsession with sleek skirts and structured blouses might not spell out the fate of the global economy, but it does reveal something else: we’re all trying to figure out how to look put-together while quietly panicking about how much it costs to be put-together. I'm no economist, but I do wonder: can some predictions come not from numbers, but from what’s hanging in our wardrobes?
Sources:
Baardwijk, M. V. & Franses, P. H. (2010). The hemline and the economy: is there any match? Econometric Institute Erasmus School of Economics. Retrieved from https://www.eur.nl/en/media/2020-11-hemline-and-economy-there-any-match#:~:text=In%201926%20an%20economist%20called,prices%20or%20gross%20domestic%20product.
BangStyle. (2025). Recession-Proof Hair Color: Why “Lived-In Luxe” is the Look of 2025. BangStyle. Retrieved from https://www.bangstyle.com/posts/recession-hair-5724
Bitter, A., Snodgrass, E. & Hartmans, A. (2025). 9 Weird Recession Indicators, From Lipsticks to Snacks. Business Insider. Retrieved from https://www.businessinsider.com/weird-recession-indicators#hemline-index-3
Borrelli-Persson. (2025). The Essential Spring 2025 Trends: Fashion Celebrates Soft Power, the Sorcery of Seduction, Dandies, and More. Vogue. Retrieved from https://www.vogue.com/article/the-essential-spring-2025-trends-fashion-celebrates-soft-power-the-sorcery-of-seduction-dandies-and-more
Criales-Unzueta, J. (2025). Why is everything in fashion suddenly a ‘recession indicator’? Vogue Business. Retrieved from https://www.voguebusiness.com/story/fashion/why-is-everything-in-fashion-suddenly-a-recession-indicator
Kane, L. (2014). What Men's Underwear Can Tell Us About The Economy. Business Insider. Retrieved from https://www.businessinsider.com/mens-underwear-index-economy-indicator-2014-9
Legka, N. (2013). The Hemline and Economy. Kyiv School of Economics. Retrieved from https://kse.ua/wp-content/uploads/2019/03/Nlegka-Thesis.pdf
Navia. (2025). The Lipstick Index: A Quirky Yet Powerful Economic Indicator. Retrieved from https://navia.co.in/blog/lipstick-index-a-powerful-economic-indicator/#:~:text=It's%20an%20economic%20indicator%20that,the%20CEO%20of%20Est%C3%A9e%20Lauder.
Nelson, E. (2001). Rising Lipstick Sales May Mean Pouting Economy and Few Smiles. The Wall Street Journal. Retrieved from https://www.wsj.com/articles/SB1006731471172641080
Noble, A. (2025). Recession Blonde: How Economic Uncertainty Spurred the Latest Hair Color Trend. Vogue Magazine. Retrieved from https://www.vogue.com/article/what-is-recession-blonde-and-recession-brunette?_sp=e753d3eb-73e9-4a39-8285-2bfb43e1c3a2.1748950087830
Purse Blog. (2019). There’s the Perfect Fendi Peekaboo For Everyone. Purse Blog. Retrieved from https://www.purseblog.com/fendi/fendi-peekaboo-guide/
Stewart, A. (2008). Alan Greenspan's Underwear Drawer. NPR. Retrieved from https://www.npr.org/2008/01/01/17759341/alan-greenspans-underwear-drawer
The Economic Times. (2022). Unconventional economic indicators that might surprise you. The Economic Times. Retrieved from https://economictimes.indiatimes.com/news/economy/unconventional-economic-indicators-that-might-surprise-you/japanese-haircut-indicator/slideshow/94961919.cms
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