Finclusion
  • News
  • Explained
  • Fact Check
  • Inclusion
  • Blog
No Result
View All Result
Paytm
  • News
  • Explained
  • Fact Check
  • Inclusion
  • Blog
No Result
View All Result
Finclusion
No Result
View All Result
Four Most Unusual Economic Indicators to Watch For

Four Most Unusual Economic Indicators to Watch For

April 4, 2023
in Explained, Markets
418 5
0
Share on FacebookShare on Twitter

The economy is like a swirling cesspool of constantly changing forces. It is multifaceted and brilliantly hued. That’s what makes it so much harder to put a finger on exactly what is going on.

Economic indicators are a genius, if you think about it. On the surface, it’s just an innocuous number. But it is powerful enough to tame a veritable force of nature. It can tell you, at one glance how the economy is doing.

You might also like

The company achieved EBITDA before ESOP profitability during the quarter.

Paytm Posts ₹1,911 Cr Revenue in Q4 FY25, EBITDA Before ESOP at ₹81 Cr

May 6, 2025
Under this scheme, UPI transactions up to ₹2,000 for small merchants are covered and will be eligible for an incentive of 0.15% per transaction. (Image source: Freepik)

The impact of UPI on small businesses in India – Explained

April 16, 2024

These indicators have been around for centuries, but they have evolved significantly over the years. Some of the most important economic indicators are GDP, consumer price index, unemployment, interest rate and manufacturing output, among others.

But have you heard of the Lipstick Index or the Big Mac Index?

Let’s take a look at some of the most unconventional economic indicators that will blow your mind.

4 Most Unusual Economic Indicators to Watch For

1. The Happy Meal Indicator

The beloved Happy Meal launched by McDonald’s in 1977 in Kansas City, Denver and Phoenix, has slowly reached the far corners of the world. Almost every country has a version of it. Even if we haven’t consumed it in our childhoods, we’re familiar with the concept. The surprise free toy that comes with the kid’s meal — what’s not to love, right?

It seems almost sacrilegious to bring economics into the Happy Meal. But it speaks to a deeper marketing insight. When companies readily splurge on their marketing campaigns and gives out lots of freebies, it means everything is hunky dory.

When the freebies dry out — that’s when you should be worried. It means money is tight, and companies are struggling to hold on to their margins.

2. Men’s Underwear Index

This is one of those items that’s generally a necessity. Men’s underwear is not something that people splurge on. The spending on men’s underwear is more or less constant. It is a stable and consistent demand — not much can rock the boat.

When the demand for men’s underwear starts fluctuating, you should hold tight. If the spending falls, it means there is very little surplus cash in the hands of people — necessities are starting to be compromised. If the spending rises, it means there is so much surplus cash that people are even spending more on men’s underwear.

3. Lipstick Index

This is an interesting one.

Made up by Leonard Lauder, the chairman of the popular makeup company Estee Lauder in 2001, the lipstick index explains an interesting phenomena observed in the early 2000s. Even though this was bang in the middle of the dot-com crash and the impending recession, lipstick sales still rose!

Now, lipstick was considered as a luxury item and it was expected that the demand for lipsticks would fall during a recession.

But it so happened that women actually substituted their myriad makeup items and instead scaled down to only the evergreen lipstick. Lipstick emerged as a makeup stable and claimed necessity status in a bizarre turn of events.

If lipstick sales start to rise suddenly, it means consumers are substituting more expensive products for cheaper ones and discretionary spending is on the downfall.

4. Big Mac Index

This is another parameter that proves just how ubiquitous McDonald’s is. The Big Mac Index distils down the average price level in each country to a single figure — the price of the Big Mac.

One of the advantages of McDonald’s far-reaching tentacles is that their products are available in most countries. Not just that, even their iconic menus retain their base characteristics across different locations. There is a version of the Big Mac in every country. 

We can therefore use the price of the Big Mac to calculate the purchasing power parity.

For example, let’s assume the price of a Big Mac in the US is $5, and the price of a Big Mac in China is 20 yuan. The dollar-yuan Big Max exchange rate is 1:4. But the actual dollar-yuan exchange rate is 1:6.91.

This means the yuan is actually undervalued in terms of the dollar.

 

Tags: economic indicators

Related Stories

The company achieved EBITDA before ESOP profitability during the quarter.

Paytm Posts ₹1,911 Cr Revenue in Q4 FY25, EBITDA Before ESOP at ₹81 Cr

by Finclusion
May 6, 2025
0

Paytm on Tuesday posted a resilient performance for the fourth quarter of FY25, reporting ₹1,911 crore in revenue—a 5% sequential...

Under this scheme, UPI transactions up to ₹2,000 for small merchants are covered and will be eligible for an incentive of 0.15% per transaction. (Image source: Freepik)

The impact of UPI on small businesses in India – Explained

by Finclusion
April 16, 2024
0

The Unified Payments Interface (UPI) has emerged as a transformative force, particularly for small businesses in India. Launched in 2016...

The fintech sector is eagerly waiting for the Union Budget 2024-25 announcement. (Image source: Freepik)

How AI and machine learning lead fraud prevention in fintech

by Finclusion
February 21, 2024
0

Fintech, where technology is making things easier by offering convenience, people also need to be aware of rising cases of...

The government of India has allowed direct listing of securities by Indian Companies at GIFT- IFSC exchanges. (Image source: Freepik)

Govt allows direct listing of securities by Indian companies on International Exchanges of GIFT IFSC

by Finclusion
January 25, 2024
0

The government of India has allowed direct listing of securities by Indian Companies at GIFT- IFSC exchanges. Finance Minister Nirmala...

Next Post
behavioural finance

Impact of market psychology and investor behavior on stock prices and the overall Indian stock market

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Finclusion

© 2024 Finclusion

Quick Links

  • About Us

Follow Us

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • News
  • Explained
  • Fact Check
  • Inclusion
  • Blog

© 2024 Finclusion

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?
Go to mobile version