How your underwear affects the economy

March 3, 2011 - PRLog -- What you’re wearing underneath your clothes right now is a reflection of the economy. Why? Because it’s just one of a number of unofficial retail indicators that illustrate how well the economy is doing.

According to the consumer pants index - see more here: http://uk.finance.yahoo.com/news/How-underwear-drawer-affects-yahoofinanceuk-556237814.html - people buy more pants when they are feeling wealthy and make do with their faded smalls when times are tight.

So if you're wearing new underwear as you read this, that could be a sign better times are here.

But this kind of indicator is nothing new. One of the first and most famous consumer indicators was the hemline indicator - see more here - http://news.bbc.co.uk/today/hi/today/newsid_9404000/9404291.stm In 1926 American economist George Taylor proposed something he called the Hemline Index. This claimed that as the economic indices slide towards the floor, so do dresses. Whereas in an economic boom, skirts gets shorter. It was thought part of the reason for this might have been because women couldn’t afford silk stockings so covered their legs instead. Or it could be that when women are feeling more optimistic, their skirts get shorter. That was certainly the case in the 1960s whereas the midi was more fashionable in the less economically certain times of the 1970s.

Now fashion isn't so rigid so instead cosmetic surgery is a guide. The number of plastic surgery operations fell by 18% in the US in 2009 but things have now improved – for cosmetic surgeons - as the American Society of Plastic Surgeons reports there were 13 million more people going under the knife in 2010.

And while we may not like it when fuel prices rise, that too is a sign the economy is on the mend. This is because when the economy is booming, demand for oil from industry and motorists rises, and so does the price. However the problem with this indicator is that if the oil price gets too high, the economy could go back into reverse. The current upheaval in the Middle East is another factor that could affect oil prices, as it did in the 1970s.

Another test to see how well the economy is doing is to take a look at your nearest railway station car park. If it’s full, or nearly full, most days, that’s a sign that the economy is doing well. A half empty car park could indicate lay offs or people saving money by walking to the station.

Industry gossip is another indicator. In good times, people chat about promotions, who’s moving where, vacancies, pay rises and bonuses. In the bad or uncertain times, it’s all closures, cutbacks and redundancies.

Property pages in the newspapers are also a good indicator – when they’re bulging, so is the economy. But a really good test of how things are is how much money is being advanced by Business Cash Advance which advances money based on future credit and debit card takings.

Commented the director of Business Cash Advance, Richard Morley: “We are seeing a definite trend upwards here at Business Cash Advance. The type of small retail outlet that is the mainstay of our client base is looking very healthy at the moment. The way our business works is a good way of judging how the economy is doing. That’s because when times are tough, our clients tend to retrench rather than expand.

“But in good times, or when they’re feeling more optimistic, they will apply for more business cash advances from us as they know expansion of their trade will mean they can easily afford it.”

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A business cash advance is not a loan nor a form of personal finance for the personal consumer. It is an advance made to high street vendors who then repay the money out of their income.

The advance is not secured. Repayments are made from the business's credit card receipts on a timescale negotiated between Business Cash Advance and the vendor.

There are no early or late repayment penalties

The advances are not for start-ups - the vendor must be already established. However, they need only to have been in business for 12 months before they can apply for a Business Cash Advance.

To qualify for a Business Cash Advance, a vendor needs 12 months of credit card receipts as the advance is repaid out of future credit card sales.

Decisions about Business Cash Advances are made much more quickly than by banks.

Unlike most banks, Business Cash Advance is happy to lend for stock, advertising and marketing or to buy or rent new business premises.