Are your fashion choices a ‘recession indicator’?
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When people have money, they like to spend it on looking good. Designer handbags, statement heels, regular trips to the salon for lashes, acrylics and expensive blonde hairdos. We feel freer, bolder and often women's skirts get a little bit shorter too. But all of that comes at a cost. So what happens when the economy takes a hit? Well, what you see is we start to dress differently. And right now, with fears of a global recession looming, the signs are all there. Our

Our heels are getting lower, skirts are longer, blondes are going darker, and our nails are starting to look a bit more natural. So can fashion and style really be recession indicators? And how does the economy impact how we look? Well, that is what you're going to hear about today on What in the World from the BBC World Service. I'm Hannah Gelbart. First of all, we're going to break down what a recession actually is. And I'm speaking to BBC business reporter Erin Delmore in New York. Hello. Hello. Hello.

In a nutshell, can you tell me what is going on in the economy right now? Yeah, we are seeing some warning signs in the U.S. economy. And of course, that reverberates around the world. And a lot of the talk these days is on whether or not we're going to see a global economic downturn. And another word for that is a recession. Now, a recession is a very specific

term. You know, we don't use it lightly. Usually we bring that term in after we've seen two consecutive quarters of negative GDP growth, gross domestic product. That's the rule of thumb. But, you know, if we see certain economic indicators trending downward, a recession can be declared before all that data on GDP comes in. So we're looking at a period of economic decline. That's what a recession is. And you would see things like

incomes falling, you would see job cuts, you would see consumer spending going down, less business investment, people would be spending less money, right? Less consumer spending. So then you would see retail sales fall and manufacturing output would fall as well. You know, it doesn't have to be all of those things, but some combination of

Basically, in a nutshell, think of it as a really tough spot to be in economically. Can you briefly walk us through the different factors that have led us up to where we are now? Now what we're seeing, especially with the president's changing tariff policies, is that it's making businesses and investors uncertain. That tends to make the stock market shaky, where we see these big swings with stocks going up and then going far, far down. And it also makes businesses wary of how to plan their next couple of weeks and months ahead of

And all of that has really stirred up this sense of economic uncertainty.

And what are the typical warning signs that people are looking out for or any indicators right now that we could be heading towards a recession? One of the biggest warning signs is if consumers start to pull back their spending. If you find that people aren't going out and buying as much as they used to buy. It could be anything. You know, it could be purchases of clothing. It could be, you know, how much money they're spending at the supermarket to feed their families. It could be luxuries like vacation, anything like that.

Largely, we find that consumers start to be more protective of their money, more protective and trying to grow their savings. Another one is whether businesses stop making the hires they were planning to make or whether they start, in fact, laying off workers. So job loss is a really big one, too. Is there anything that consumers, people like us, can do to prepare ourselves and prepare our finances ahead of an economic downturn? It's hard to give exact financial advice here, but I can tell you what many consumers do. Many people...

tend to try to save up where they can. And believe me, I cover inflation in this country and around the world. I know it is incredibly hard to save money these days because goods are so expensive. And, you know, that is one of the top financial pressures on people and on households.

But saving a bit of cash is what people generally tend to try to do in recessions. By the way, that goes back to a big recession indicator, right? If consumer spending goes down, we tend to think a recession is on the way. But there is, you know, actually, there's something interesting here to mention as well. There used to be something called the lipstick effect. And this is something we would talk about years ago, where consumers during times of economic hardship would actually treat themselves to small luxuries. And maybe it's, you know, an expensive iced coffee when the weather gets hot.

Maybe it is, in fact, a lipstick. And the thought was that if there's something that costs just a couple of dollars and is a mood booster and makes people feel good, they'll still spend on it. And that has historically held up. But I do wonder if the lipstick test, the lipstick effect, really...

really still makes sense in 2025. You know, as an anecdote, when that came into play and people were talking about it in 2008, the lipstick I buy cost $14.50. Now in 2025, my lipstick costs $27. So I don't really know that that counts as a small indulgence for me anymore. This brings us really nicely into what we're talking about today. Do you think that fashion can predict economic change? Yes, 100%.

And I'll tell you why. One of the economic indicators I really like to watch is what we see happening at beauty salons. You know, a lot of women will go and get highlights or get a perm, you know, some kind of expensive hair treatment. And when we start to see people either forgoing those kind of discretionary hair treatments or, you know, maybe it's eyelash extensions, something like that, or going further between appointments, it's a sign that consumers are trying to stretch their budgets a little bit further.

And let's look at it in reverse for a moment. You know, in 2020, a lot of people kind of defaulted toward cozier, homier clothing. A lot of people weren't going into the office anymore. So suddenly we're seeing more sweatpants. We're seeing more wide leg joggers. Right. But then when we get the reopening of the economy and travel springs back up and people can get together for large outdoor gatherings, large indoor gatherings, even people are going back to bars. What did we see? We saw sea

We saw neons. We saw shorter skirts and tighter dresses. I mean, it was really kind of this jubilant atmosphere that really portrayed itself through fashion. And I absolutely think that you can use the choices people are saying about how they feel. And fashion is a big means for that in what's going on in the world. Well, Erin, thank you so much for speaking to us. An absolute pleasure. Thanks for the chat. Thank you.

As Erin said, people often change their spending habits based on the health of the economy. During tough times, some people choose to invest in items that they'll be able to wear many years into the future. Here's content creator Leah Holm. Hey, what's in the world? What I ask myself before purchasing an item is,

Can I find at least three ways to style this piece with clothes that I already have in my closet? Do I like this color on my complexion? Do I like this shape on my body type? Does the material and the fit of the garment feel comfortable? Is this

a realistic purchase for my current or future lifestyle and lastly and very importantly do i see myself wearing this piece in five years time this way you'll make more mindful decisions and you become more aware of your tastes and your personal style

We've talked a lot about the economy and how that impacts trends, but trends also stem from culture, shifting social norms, perceptions of wealth, people's sense of stability, and so much more. And here to tell us more about that is Caroline Stevenson from the London College of Fashion. Hi, Caroline. Hi, how are you? Good, thank you.

Thank you. Can you tell me how fashion trends come about in the first place? Well, traditionally, fashion trends were said to originate in the wealthy classes and it's referred to as the trickle-down effect or the idea that the wealthy elite sets trends that then the new middle class and the working classes would imitate.

But it's never quite as linear as that trickle down suggests because fashion trends during modernity also relied on the lower classes wanting to emulate upper class fashion. So this really created the market for clothing that looked like upper class fashion, perhaps wasn't as well made or didn't use the same kind of fabrics. You mentioned trickle down fashion. What about...

about things like streetwear. Is there fashion that trickles up as well? Because of the kind of explosion of youth culture and subcultures during the post-war period, we now have what we call trickle-up trends, where styles kind of emerge from the street, so to speak. And these can influence luxury brands. So for example, a skateboard company like Supreme collaborating with Louis Vuitton. And oftentimes the trends that happen on the street are seen as more authentic because they emerge through social and cultural trends.

and they're not simply manufactured and that's very desirable. But I would say nowadays trends come from all directions, different kinds of aesthetics and different kinds of ideas that circulate through social media. So it's all very chaotic. Talk me through some of the big trends that we are seeing today.

right now and also what they tell us about the state of society? Well, clothing, it always reflects wider cultural shifts. It always reflects socioeconomic context. And right now, the clean girl, the quiet luxury trends are quite big. And they've been around for a while now too. So I think we can safely say they are definitely linked to our wider social and cultural context. And I think they speak to the economic crisis. So in times of austerity, trends usually move towards more subtle, more

covert styles and away from these kind of ostentatious displays of wealth, which can seem quite crude and provocative. You mentioned the clean girl aesthetic, quiet luxury, there's also office core. Can you describe what those styles look like to people who maybe are not following fashion quite as closely? Clean girl is a kind of minimalist Y2K fashion, like blue denim jeans and a white top, very minimal makeup and a very kind of fresh and healthy, dewy look.

What about office core? Office core kind of reinterprets very classic office wear, but makes it kind of individual. So like female suits, but maybe with a bright top underneath or a very feminine top underneath. An office siren? An office siren is the kind of sexy version of office core. What about quiet luxury? Quiet luxury is about tailored clothing, bespoke pieces, very well curated wardrobes and often very subdued colours as well.

How much are these trends linked to the economy? Well, the office core trend in particular has seen another big resurgence in recent catwalks. And we're starting to see a lot of ties and suit jackets in the mix as well. And today, I mean, economic power is shifting across the globe in very radical and very terrifying ways. So I think it follows that fashion would take stock of that complexity. So I think this office core trend provides a mean to kind of reclaim a sense of control or a sense of

balance in what's otherwise a very kind of unstable world. It does make sense with social media. It has changed the way that people can get status, celebrity money. But what other trends from the last 10 to 15 years have also gone hand in hand?

with major economic changes? So I would say the last 10 to 15 years, it has been quite muted in terms of fashion. So more kind of radical and experimental trends really only emerge when there is that kind of stability in the economy. But the biggest trends that have been linked to the economy, I would say, are athleisure and also real minimalist fashion, which, you know, very similar to office core that they emphasize is kind of paired

back very curated wardrobe with a few kind of high quality pieces and athleisure also signifies this kind of adaptability or the ability to move between work and leisure or work and going to the gym very easily it also signifies a very kind of healthy and productive lifestyle Caroline thank you so much for joining me on the podcast no problem thank you

That's it for today. Thank you so much for joining us. And if you like this episode, we have done others on things like how India is the main global supplier of human hair for wigs and hair extensions. And we've talked about how some K-beauty brands are looking at their shade ranges and making them more inclusive. You can find those wherever you get your BBC podcasts. I'm Hannah Gelbart. This is What In The World from the BBC World Service. And we'll be back with another episode soon. See you then. Bye.