The Ends of the Economy

When the American, and, for that matter, global economy took a leap backward in the fall of 2008, many households had to find ways to cut back their spending. Those who were already struggling or who were carrying a lot of debt were particularly harmed by the downturn, often finding themselves unable to meet mortgage and rent payments. But the recession hit those of greater financial means as well. Many households which were previously comfortable economically tightened the belt — they began eating out less and cooking more, took fewer vacations (remember when the word “staycation” entered our parlance?), and generally found ways to stretch the dollar.

Economists often use the fluctuations in these spending habits as indicators of the economy’s health. Of particular note are items which in good times were typically considered necessities. Sometimes, those are easy to imagine — maybe you go an extra couple of thousand miles before you get your car’s oil changed, for example.

But some are examples are surprising — a list which includes items such as diapers and underwear.

In the summer of 2009, the Washington Post came across a curious stat. From 2004 to 2008, sales of men’s underwear rose steadily year over year, with at least 2% growth each year and peaking at 3.7% growth in 2007. But in 2009, men bought much less underwear — 2.3% less than they had the year before. Basically, men were trying to stretch their dollars by getting a few extra wears out of each pair of boxers or briefs. As one analyst explained to the Post, the behavior was analogous to “trying to drive your car an extra 10,000 miles,” although in a much different context. And one research group (called Mintel, in case you are looking to commission a study about American underwear purchasing habits) noted in the Post article that the purchase of single-pair packs was up in 2009 while packs of four or more fell slightly. People only bought what they needed for the immediate future.

The purchase patterns of diapers reflected similar behavior. As Business Insider reported in 2011, diaper sales dipped 1% by volume and 3% by amount spent that year. Another study cited in the same article noted an even greater dropoff — parents were buying fewer diapers and switching to cheaper, arguably lower-quality options. The dip in diaper purchases likely meant that babies were being changed less often, which isn’t great for the kids who are now in close contact with you-know-what for longer periods.

Perhaps unsurprisingly, the purchases of another baby product went way up. Diaper rash cream spiked 8%.

Bonus Fact: Another toddler-focused economic indicator? Crayons, maybe. In October 2009, NPR published a letter from a customer of Red Robin restaurants in Washington state. The writer noted that the typically very kid-friendly restaurant chain had, prior to the recession, given each child a red, blue, green, and yellow crayon with which to decorate their paper place mats. But the last time he visited? The kids only received two crayons apiece.

From the ArchivesChildren of the Box: Why you don’t have to buy diapers in Finland — at least not right away.

Related: “The WSJ Guide to the 50 Economic Indicators that Really Matter” by Simon Constable and Robert E. Wright. Mentions underwear, but not diapers. Also mentions Big Macs, for what it’s worth.