Latest news with #hemlineindex
Yahoo
25-05-2025
- Business
- Yahoo
What Is the Hemline Index, and Is It an Accurate Recession Indicator?
The 'hemline index' is one of those economic theories that never quite disappears. Popularized in the 20th century, it claims a correlation between skirt lengths and the stock market: shorter hemlines in boom times, longer ones in downturns. Over time, this idea evolved into a broader suggestion: Fashion reflects the health of the economy. But it's far from straightforward. Read Next: Find Out: In today's world, the idea that hemlines act as a reliable economic barometer may be out of step with reality. Also see five alarming signs you're not ready for a recession. The hemline index is often linked to George Taylor, a Wharton economist in the 1920s. He's widely credited with observing a link between rising skirt lengths and rising markets, but the story is more complicated, as he never actually linked skirt lengths to economic cycles. His 1929 Ph.D. thesis examined the rapid growth of the hosiery industry in the 1920s, according to InStyle, identifying shorter skirts as one reason women were buying more stockings, not as a signal of economic change. Over time it's been oversimplified and reshaped into a so-called market indicator that's been repeated in headlines, books and investment commentary. Be Aware: In theory, the idea makes some sense: When the economy is strong, fashion might be more 'daring,' while economic downturns bring more conservative styles. In practice, the pattern isn't quite as consistent. A 2023 study by researchers at Erasmus University Rotterdam tested the theory against real economic data and found that while there is a relationship between hemlines and the economy, it runs on a delay. It found that skirt lengths tend to change about three years after the economy does. An earlier study from 2015 had similar results, though with a four-year time lag. That suggests longer skirts may reflect a previous downturn, not a coming one. The hemline index is certainly a fun story, but is it a genuine forecasting tool? While some studies have looked into the relationship between skirt lengths and economic conditions, they suggest influence, not a true economic indicator, which is data used to assess or predict economic performance. It makes sense that economic conditions might shape what people buy and wear, but that doesn't make skirt lengths a reliable signal for what markets will do next. Real economic insight comes from actual data, not what's trending on the runway. More From GOBankingRates Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck Sources InStyle, 'Is the Hemline Index Actually Real?' Erasmus University Rotterdam, 'The Hemline index: true or false?' Journal of the Korean Society of Clothing and Textiles, 'Does Economy Dictate Hemline Move? Verification of the Hemline Theory.' This article originally appeared on What Is the Hemline Index, and Is It an Accurate Recession Indicator?
Yahoo
25-05-2025
- Business
- Yahoo
What Is the Hemline Index, and Is It an Accurate Recession Indicator?
The 'hemline index' is one of those economic theories that never quite disappears. Popularized in the 20th century, it claims a correlation between skirt lengths and the stock market: shorter hemlines in boom times, longer ones in downturns. Over time, this idea evolved into a broader suggestion: Fashion reflects the health of the economy. But it's far from straightforward. Read Next: Find Out: In today's world, the idea that hemlines act as a reliable economic barometer may be out of step with reality. Also see five alarming signs you're not ready for a recession. The hemline index is often linked to George Taylor, a Wharton economist in the 1920s. He's widely credited with observing a link between rising skirt lengths and rising markets, but the story is more complicated, as he never actually linked skirt lengths to economic cycles. His 1929 Ph.D. thesis examined the rapid growth of the hosiery industry in the 1920s, according to InStyle, identifying shorter skirts as one reason women were buying more stockings, not as a signal of economic change. Over time it's been oversimplified and reshaped into a so-called market indicator that's been repeated in headlines, books and investment commentary. Be Aware: In theory, the idea makes some sense: When the economy is strong, fashion might be more 'daring,' while economic downturns bring more conservative styles. In practice, the pattern isn't quite as consistent. A 2023 study by researchers at Erasmus University Rotterdam tested the theory against real economic data and found that while there is a relationship between hemlines and the economy, it runs on a delay. It found that skirt lengths tend to change about three years after the economy does. An earlier study from 2015 had similar results, though with a four-year time lag. That suggests longer skirts may reflect a previous downturn, not a coming one. The hemline index is certainly a fun story, but is it a genuine forecasting tool? While some studies have looked into the relationship between skirt lengths and economic conditions, they suggest influence, not a true economic indicator, which is data used to assess or predict economic performance. It makes sense that economic conditions might shape what people buy and wear, but that doesn't make skirt lengths a reliable signal for what markets will do next. Real economic insight comes from actual data, not what's trending on the runway. More From GOBankingRates Clever Ways To Save Money That Actually Work in 2025 Sources InStyle, 'Is the Hemline Index Actually Real?' Erasmus University Rotterdam, 'The Hemline index: true or false?' Journal of the Korean Society of Clothing and Textiles, 'Does Economy Dictate Hemline Move? Verification of the Hemline Theory.' This article originally appeared on What Is the Hemline Index, and Is It an Accurate Recession Indicator? Sign in to access your portfolio
