One less conventional indicator of an economic downturn is the completion of the world's tallest buildings. The Merdeka 118 tower in Malaysia is said to be the second tallest skyscraper in the world.
Lightrocket and Sopa images are from the same source.
It's not just stock and bond markets that can signal an economic downturn.
The men's underwear index, for example, is one of the more unconventional economic indicators that could be worth monitoring.
There have been fears of a recession recently. The Federal Reserve's plans to aggressively hike interest rates and record-high inflation have caused investors to worry.
The U.S. government bond market has a yield curve that has historically been inverted prior to recessions. The yield on the 2-year bonds rose above the 10-year rate as investors sold out of short-dated Treasurys in favor of longer-dated debt.
An inverted bond yield is not a guarantee of a recession according to economists. This indicator can be seen as early as two years before an economic downturn begins.
Employment and consumer spending figures can be used as indicators of a recession. Market watchers have turned to more unusual indicators of economic health.
Andrew Lawrence was a British economist. The construction of the world's largest buildings is linked to the economic crisis.
In an interview with the Council on Tall Buildings and Urban Habitat, Lawrence said that he had looked as far back as the late 1800s and found correlations between the completion of the world's tallest buildings and economic crises.
The Empire State buildings in New York were completed during the Great Depression.
Lawrence explained that the completion of these skyscrapers tends to cap off what is a large building boom.
The Merdeka 118 tower is the second tallest building in the world and was completed at the end of 2011. One of the tallest skyscrapers in the Western hemisphere, the Steinway Tower in New York, has just been completed.
Alan Greenspan was the Federal Reserve Chairman.
During the global financial crisis, Greenspan told Robert Krulwich that underpants were one of the last pieces of clothing men looked to buy.
Greenspan said that sales of men's underpants tend to be consistent, but that dips in sales indicate that men's finances are so stretched they decide to hold off on buying replacements.
The hemline index emerged from a thesis by George Taylor, an economist at the Wharton Business School. When markets are on the rise, skirts become shorter.
The emergence of the mini skirt in the 1960s and the economic exuberance of the 1920s have been cited as examples to support this theory.
Questions have been raised about its credibility.
The data on hemlines was collected in a study published in 2010 by the Erasmus School of Economics Econometric Institute.
The main finding is that the urban legend holds true but with a time lag of three years.
The economic downturn of 2001 led to the creation of the LIPstick index by Leonard Lauder. He suggested that women would spend more on small luxuries when times are hard.
During the Covid-19 Pandemic in 2020, sales of makeup declined as consumers were restricted to staying at home.
Russ Mould, investment research director at AJ Bell, told CNBC via telephone that while investors should not rely on these soft economic indicators, they were always worth keeping an eye on.
When the prices of luxuries such as champagne and art go through the roof, investors should start to feel a bit more concerned.
He said that it is a sort of bull market, happy-days-are-gonna-last-forever-type behavior.
There are signs that a recession is on the way. There are ways to protect your savings.
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