Three Economic Indicators from Unconventional Sources

Every day the market closely watches economic indicators to tell us what may lie ahead. Some of the data comes quarterly, some monthly and some even weekly. From GDP growth to unemployment reports, inflation to consumer spending data, I’m not certain that I have ever seen in my professional career a time where the markets have waited with bated breath to digest and react to the data, especially since the Fed started lowering interest rates.

Plenty of economic indicators utilize a variety of data to provide some explanation for where the market could be heading and some may be more useful than others. But what about some lesser known “obscure” indicators? From men’s underwear to lipstick; from Big Mac’s to hemlines; from sausage sales to the tooth fairy, there are other ways to gain insights into economic health. Peter C. Earle, a senior economist at the American Institute for Economic Research, highlights that while informal indicators may not be conclusive on their own, their combined occurrence can point to broader economic issues.

There are a few of these lesser-known indicators I believe give keen insight into the state of the economy.

There is a significant increase in traffic on online dating sites, especially during a recession. During prosperous periods, people tend to meet potential partners through in-person activities. However, during downturns, dating apps often see higher engagement as people seek less expensive ways to meet others and support during stressful times. This was studied in the U.S., during the 2008 recession and again after society began opening after the COVID lockdowns when the online dating service Match.com reported that it saw a huge surge in traffic.

The more cardboard boxes being produced, the better the economy typically performs. The demand for cardboard boxes often correlates with economic booms and busts because it strongly represents the level of consumer spending. Given how many items are shipped inside cardboard boxes, it makes sense that demand for cardboard boxes indicates consumer demand for online goods, which could indicate a potential  rise or decline in gross domestic product (GDP). As a leading market indicator, it can give investors an early sign of where the economy is headed and investors can take a look at the index for themselves on the Federal Reserve of St. Louis’ website. 

Market participants can use this information to decide how to manage risk in the manufacturing and retail sectors, the packaging and shipping industries, or even in cyclical stocks that tend to respond more strongly to economic expansions or contractions.