Consumer confidence reached a six-year high in May before falling slightly in June.  This is good news, but we always looks for some confirmation of economic data.  One of Alan Greenspan’s favorite economic indicators was the Men’s Underwear Index (MUI).  Because so few people ever see men’s underwear, replacing it is an expense that men readily defer when the economy is weak.  Sales of men’s underwear drop like a rock when the economy stumbles and recover slowly when the economy rebounds.

So, it was good confirmatory economic news last week when the marketing research group NPD Group announced that sales of men’s underwear has rebounded a whopping 7.9% over the past year!

My analysis of this economic news is that, at first blush (literally), a huge 7.9% jump in men’s underwear sales suggests the economy is growing even faster than 7.9%, which would be a fantasy.  I suspect this surge reflects the long length of this weak economy recovery.  Men have delayed the purchase of new underwear for so long, that they were forced to finally replace their stock of drawers.

While men’s underwear represents a tiny percentage of the gross domestic product (GDP), the logic of playing catch-up or replacing worn-out stock could have big implications.  As our slow economic recovery has lumbered along, the average age of cars in the U.S. has grown to 10.8 years, which is an all-time high.  Replacing that huge fleet will have a huge economic impact and cannot be postponed forever . . . like men’s underwear.

I wonder how old is Mr. Greenspan’s underwear anyway . . . no, never mind!