Makeup is a cheap thrill for penny-pinched shoppers. When the economy is weak, most consumers cut back on nonessentials and instead spend their money on the little luxuries--for example, lipstick. That's exactly what happened during the 2001 recession, when lipstick sales soared even as the overall economy declined. These days, the so-called lipstick index (a term coined a decade ago by Estée Lauder chairman emeritus Leonard Lauder) seems to indicate more tough times to come. Lipstick sales are up 14% this year. And nail polish, which more recently has become a bellwether of economic turbulence, has risen an even more disturbing 54%. "Nail polish has become the heir to lipstick in this recession," says Lauder. "I picked up this signal from my granddaughters. All of a sudden, there was all this nail enamel in crazy colors."
That's great news for the beauty industry; Estée Lauder just recorded its best North American sales in a decade. As for the rest of us, we may be headed into a double dip, but we'll go there looking fabulous.