Sorry!! The article you are trying to read is not available now.

Does the Hemline Indicator Really Predict the Economy?

Print comment Post Comments
"With two days to go until the end of the Milan Fashion Week, the mini skirt has all but disappeared from the runway, replaced by hemlines that fall around or below the knee. Long skirts are also very popular." -- Associated Press, Sep. 25, 2010, Hemlines Are Fashion at Milan Shows

While we're considering the rise and fall of hemlines, a bit of research from the Erasmus University Rotterdam School of Economics tells us the urban legend of hemline correlation to the economy actually has some merit. According to legend, hemlines fall as the economy declines and get shorter as the economy gets better.

After collecting monthly data on hemlines from 1921-2009 and running the data against the National Bureau for Economic Research chronology of economic cycles, the findings show the urban legend holds true, but with a lag of about three years. In other words, come 2011-2012, we're gonna be wearing skirts with hemlines down around our ankles.
POSITION:  No positions in stocks mentioned.