How (Not) to Measure Economic Activity

Most of us look at the GDP, the S&P, or the CPI to see the state of the economy.

However, there are other possibilities.

Unusual Economic Indicators

The Super Bowl Indicator

During 1978, a NY Times sportswriter noted that 11 out of 12 Super Bowl outcomes correlated with the direction of the stock market. When the AFC team won, markets plunged while an NFC victory predicted a bull market.

Actually, it all depends on when you look:

The Men’s Underwear Index

Also known as the MUI, the Men’s Underwear Index was reputedly the go-to metric for former Federal Reserve Chair Alan Greenspan (1987-2006). As he (or others) explained, because underwear is hidden, no one knows when we cut back. Consequently, during a recession, men will wait to buy new underwear. So, monitoring those sales let Dr. Greenspan know the trajectory of economic activity.

Based on the following graph, the future looks pretty good:

Our Bottom Line: A Christmas Inflation Indicator

During the past 41 years, PNC Bank has created a Christmas price index composed of the gifts in “The Twelve Days of Christmas.” As a price change metric, it is our unusual economic indicator for inflation.

For 2024, PNC’s index was Up 5.4 percent from last year–double the CPI’s 12-month 2.7%. While the twelve gifts in the song cost $49,263.47, when we repeat the verses in “The Twelve Days of Christmas,” we wind up paying $209,272 for 364 gifts.

As for the individual items, five gifts had no price increases:

• Two Turtle Doves
• Four Calling Birds
• Five Gold Rings
• Seven Swans-A-Swimming
• Eight Maids-A-Milking

Then, because of rising wages for skilled labor, four items were more expensive:

• Nine Ladies Dancing (+3%)
• 10 Lords-a-Leaping
• 11 Pipers Piping (+15.8%)
• 12 Drummers Drumming (15.8%)

and

• the Three French Hens were up 5%

Finally, while the price of the Partridge in the Pear Tree was unchanged, the Tree, reflecting higher housing costs, was up a whopping 17.1%.

Enjoy!

My sources and more: A handy source for the basics, Investopedia had the Super Bowl facts. From there, for more on the MUI, Quartz is a possibility. And, as we would expect, PNC told us everything about its “Twelve Days of Christmas” price index.