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Leading Lipstick Indicator

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Definition of 'Leading Lipstick Indicator'

This is an Economic Indicator which is based on the theory that consumers will buy less-expensive "luxury" products, such as lipstick, when they are not confident about the future. This means that lipstick sales will tend to rise preceding a recession or during a period of economic uncertainty.

This indicator was discovered by Estee Lauder's chairman Leonard Lauder who discovered that during tough economic times his lipstick sales went up. The indicator has proved to be reliable for a number of years. Examples of its reliability often point to the period after the 911 terrorist attacks when the sales of lipstick doubled.

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