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What Champagne, RVs, and Underwear Can Predict About the Next Recession
The quirkiest indicators economists are watching — and what they reveal about the state of the U.S. economy
It’s the nagging question on every businessperson’s mind: Is a recession on the way? Economists have been busy reading the usual tea leaves — eyeing the yield curve, corporate profits, employment, consumer spending, freight shipping. They’ve also been looking in some mighty strange places.
For years, economists have been hunting for new warning signs of impending economic gloom, including a seemingly odd assortment of goods that Americans are putting in (or leaving out of) their shopping carts. “There are plenty of small things going on that are hints,” says Michael Hicks, an economist at Ball State University.
Here are a few of the quirkier recession “indicators” that economists have been watching — what each reveals, its track record, and what they could predict about the U.S. economy in 2020.
Recreational Vehicle Sales
Why: Economists started watching RV sales after the 1981 recession. The reasoning is that if people are uncertain about their financial future, they tend to hold off on big-ticket purchases like RVs — which can cost between $10,000 and $300,000.
Past performance: Drops in RV shipments to dealers have preceded all three of the most recent recessions.
Current outlook: Not so good. The crystal ball of glamping foretells difficult times ahead. Late last summer, RV sales definitely began their slide, just a few weeks after the start of the Trump trade tariffs, and shipments dropped 20% between 2018 and 2019, down to 216,581.
The Champagne Index
Why: If you’re feeling pretty good about life, you pop the cork and celebrate, right? That’s why many…
