Question 1

What is the Men's Underwear Index?

Accepted Answer

Men defer boring purchases when worried about money. When underwear sales dip, consumer confidence has already cracked — Alan Greenspan cited this as a leading indicator of economic sentiment.

Question 2

What is the Cardboard Box Index?

Accepted Answer

Every shipment needs a box. Cardboard box production is a surprisingly clean leading indicator for real economic activity, often moving a quarter before GDP catches up.

Question 3

What is the Big Mac Index?

Accepted Answer

The Economist invented the Big Mac Index in 1986 as a lighthearted measure of purchasing power parity. Same burger, same process everywhere — the price tells you exactly how far your dollar goes relative to other currencies.

Question 4

What is the Temp Staffing Index?

Accepted Answer

Employers hire temporary workers before committing to permanent staff — and cut them first when conditions worsen. The Temp Staffing Index consistently leads total payroll employment by 2–3 months, making it one of the cleanest early warning signals in the labor market.

Question 5

What is the Lipstick Index?

Accepted Answer

Estée Lauder's Leonard Lauder noticed lipstick sales jumped as the 2001 recession hit. The theory: when consumers cut big luxuries, they substitute small affordable ones. Lipstick sales rising in a downturn has held up across multiple recessions as a reliable consumer sentiment signal.

Question 6

What is the Used Car Price Index?

Accepted Answer

Used car prices are hyper-sensitive to credit conditions and supply chain shocks. In 2021, used vehicle prices alone were responsible for roughly a third of U.S. CPI inflation — a single line item moving the headline number economists use to set monetary policy.

Question 7

What are leading economic indicators?

Accepted Answer

Leading economic indicators are data points that tend to change before the broader economy shifts. Unlike GDP — which is reported months after the fact and revised repeatedly — leading indicators like temp staffing, cardboard box shipments, and credit card delinquency rates give an early read on where the economy is heading.

Question 8

Why are alternative economic indicators more accurate than GDP?

Accepted Answer

Official GDP figures are released with a significant lag, revised multiple times, and subject to methodological smoothing. Alternative indicators like temp staffing employment, cardboard box shipments, and Big Mac prices update faster, are harder to manipulate, and reflect what real people are actually doing with their money.

Question 9

Are we in a recession right now?

Accepted Answer

GDPv2's real-time recession probability score aggregates leading alternative indicators — temp staffing, credit card delinquency, cardboard box shipments, and consumer sentiment — into a 0–100 score updated daily. Official GDP lags by months. Alternative indicators lead by quarters. The dashboard shows the current score and the signals driving it.

Question 10

What is recession probability and how is it measured?

Accepted Answer

Recession probability is an estimate of the likelihood that the U.S. economy is in or entering a recession, based on leading indicators. GDPv2 calculates it by weighting temp staffing trends, credit card delinquency rates, cardboard box production, and S&P 500 direction — all of which historically lead official recession declarations by one to three quarters.

Question 11

Are we in a recession right now?

Accepted Answer

GDPv2's real-time recession probability score provides a current read based on leading alternative indicators — temp staffing, credit card delinquency, cardboard box shipments, and the Men's Underwear Index. Official NBER recession declarations lag by 6–18 months. GDPv2's score updates daily using data that historically leads those declarations by one to three quarters. Check the live score at gdpv2.com.

Question 12

What is the GDPv2 recession probability score?

Accepted Answer

The GDPv2 recession probability score is a 0–100 composite index that blends traditional indicators (unemployment, S&P 500, temp staffing, consumer sentiment, credit card delinquency) with alternative leading indicators (cardboard box shipments, Big Mac Index, Men's Underwear Index). Scores above 60 indicate elevated recession risk. The score updates daily and is designed to signal stress before official GDP figures confirm it.

Indicator	Z-Score	So What?
Men's Underwear Index	+3.1	Men defer invisible purchases when money is tight. Alan Greenspan cited this. When underwear sales dip, consumer confidence has already cracked.
Restaurant Employment	+2.0	Restaurants are pure discretionary spend. When households feel squeezed, eating out is one of the first things to go.
Big Mac Index	+2.0	Same burger, same process, 100+ countries. The price spread reveals what purchasing power actually looks like on the ground.
Lipstick Index	+2.0	Lipstick sales jumped 11% as the economy crashed in 2001. Small luxuries spike when big ones get cut — the affordable splurge effect.
Grocery Price Index	+1.9	Everybody buys food. That makes this the most democratic price signal in the basket — it hits every income level, every zip code, every week.
Retail Sales	+1.7	Direct consumer spending — not surveys, not projections. What people actually bought.
Shelter Cost Index	+1.4	Housing is the largest line item in most household budgets. When shelter costs outpace income growth for long enough, everything else gets squeezed.
Cardboard Box Index	+1.3	Every shipment needs a box. This PPI is a clean leading indicator for real economic activity — it moves about a quarter before GDP catches up.
TSA Passenger Volume	+1.3	Air travel is a big-ticket discretionary expense. Volume drops before households say they're cutting back.
Credit Card Delinquency Rate	+0.9	People pay rent before their credit card. When delinquency rises, households aren't behind on payments — they've run out of options.
Temp Staffing Index	-0.9	Employers hire temps before committing to permanent staff and cut them first. Leads total payrolls by 2–3 months.
Used Car Price Index	-0.9	Hyper-sensitive to credit conditions and inflation. One of the most honest real-time price signals in the basket — hard to smooth or revise away.
Electricity Generation Index	-0.8	When generation drops outside of seasonal patterns, real economic activity is contracting.
Recession Search Volume	+0.4	When people search 'recession' en masse, the fear is already priced into behavior. You don't look it up when you feel fine.

GDPv2

Signal Comparison

Key Insights

What's Driving the Score

THE SCORE, EVERY MONDAY.