The folks who get paid big bucks to know are saying the recession is over. Then again, those are the same folks who didn't head off the latest crippling crisis swelling right beneath their noses.
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Want to know if we're really on the road to recovery? Look for pink ties, says Robert Allsbrook, chief economist for Regions Bank, in Birmingham, Ala.
"Men and women wear bright colors when they feel confident, and drab beige colors when they feel bad," says Allsbrook. "Men's ties are a leading indicator because they're a very inexpensive way to change a wardrobe."
Last summer, even before
Lehman Brothers (otc:
LEHMQ.PK) fell into bankruptcy, Allsbrook says he saw muted wardrobes, what he calls "funeral clothes." And now? "Since the start of the summer, I've seen lots of men wearing pink and fuchsia colored ties," he says.
Economists have access to reams of data and sophisticated computer models at their disposal, based on standard variables like the unemployment rate, bond yields, new housing starts and inflation. One problem with much of that data: "The stuff that people are looking at in the news are lagging indicators," says Owen Shapiro, principal at Leo J. Shapiro & Associates, which tracks consumer and investor behavior. Clouding matters further, he adds: "Many numbers have an emotional or disproportional impact on how people feel."
Even stock prices—which in theory are supposed to reflect the future earning power of the companies they track—don't do a consistently good job of calling a crash, or a recovery.
For extra enlightenment, we went looking for a slew of offbeat economic indicators. The overall message: Things aren't getting worse, but we still have a long way to go. Here are some highlights:
Telecommunications InfrastructureDave Maddox owns and operates communications towers leased to wireless operators like
Sprint (nyse:
S) and T-Mobile. Each of his 10 towers (what your cellphone talks to in a given area) in the Los Angeles and Boston metropolitan regions can service up to 10 different carriers. This summer, he set up four new base stations for four operators looking to expand their coverage areas—the most activity he's seen in several years. That kind of cap-ex spending portends a rebound, he says.
Christie's Autumn Wine AuctionOf all items auctioned at Christie's, wine may be the best proxy for economic activity. That's because—unlike rabid, 17th-century-furniture collectors, for whom price might be no option—wine bidders are often speculators looking to buy low and sell high, explains Heather Barnhart, the auction house's senior vice president and regional director for the Americas. In September Christie's moved US$2.6 million worth of vino, nearly double last year's volume. "I think it's a great measure of people's overall confidence," she says.
The Size Of Restaurant Garbage PilesAmericans are eating out again, and that's a good sign. You can see that trend in the size of the garbage piles behind restaurants, says Sam Firer, a consultant for the Hall Company, a restaurant advisory. "The garbage is not from what people have eaten, it's from what you use to make the food," says Firer, whose clients include New York's B.R. Restaurant Group, which owns Dos Caminos, Blue Water Grill and Blue Fin. After a rough 2008, he adds, "this summer it was stinky [of garbage] again."
Another good sign: One of Firer's clients, Alicart Restaurant Group, is opening a 6,000-square-foot Carmine's Italian restaurant in Washington, D.C. "And they're conservative folks," says Firer.
Denim SalesDenim offers a dependable take on the economy, says Marshal Cohen, chief industry analyst at NPD Group, a market research firm. Reason: Jeans are a relatively cheap investment and one of the first things consumers buy when the economy starts to bounce back. While overall apparel sales have slumped, denim sales have already started to pop: For the six months from January to June, denim sales jumped 5.3% to US$7.6 billion vs. the same period in 2008.
Hotel CancellationsLast winter no one wanted to keep a date with the
MGM Mirage (nyse:
MGM) in Las Vegas. Cancellations at the company's meeting and corporate events department spiked by more than 50% between October 2008 and March 2009, says Dan D'Arrigo, executive vice president and chief financial officer. "We couldn't drop prices fast enough to keep our space filled," he adds. By early April, cancellations had slowed down, and by August, the rate was about 20% (in ordinary climates it hovers in the mid teens).
More good news: In the past three months, major event planners are booking space for 2010, 2011 and even 2012. "We couldn't get meeting event planners to take our calls earlier this year," says D'Arrigo.
Go to Forbes.com to view the slideshowIn Depth: 10 Uncommonly Clever Economic Indicators
