What's the Lipstick Index?

The lipstick index conceives that during economic recessions, people cut back on discretionary spending, but they still want to make themselves look and feel nice so they flock to small, affordable luxuries, like lipstick.

With increasing mortgage, energy and food costs, women are still wanting some kind of pampering or luxury.

The ‘lipstick index’ concept was created by Leonard Lauder, chairman of Estée Lauder cosmetics and backed up by the company’s own sales numbers multiple times throughout history when the US economy has experienced downturns. ie from 2000, 2008 and originally in the Great Depression between 1929 - 1933.

In other words, lipstick sales could be a sign about whether a recession is looming—or already underway.

Recent economist data this year show lip products (including lip gloss) sales revenues in the first quarter were up 48% compared with the same period in 2021, and revenue rising 28% in the second quarter of 2022.

Does this mean the US or Australia are headed for a recession?  

Not necessarily as there is no one indicator that guarantees a recession is coming.  Investors need to look at a range of economic indicators.

Saying that, lipstick sales certainly are an interesting place to start

who say’s finance is boring!  

This trend or phenomenon is another example of how YOU can transition from being a consumer of products to an investor in a company’s products.

And for some unsolicited beauty savings advice – here’s my tip:  

buy a gorgeous colour nail polish and give yourself a manicure or pedicure rather than a visit to the salon and with your savings, start researching where you can invest the $$$

What other cost-effective luxuries can we women pamper ourselves for with during these times?


Karen Eley is a financial coach with more than 20 years’ experience as a financial adviser. Through her business, Women Talking Finance, she helps women to be confident and knowledgeable about all things finance. Karen translates complex financial concepts into simple digestible ideas.

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