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Is The Recession Over? Check Your Undies

You've probably heard about the hemline indicator, the lipstick indicator and other quirky things that are used to measure where the economy is heading. But how about another: men's underwear?

Men's Underwear
Men's Underwear

(Video: CNBC's Becky Quick discusses the undie indicator.)

During a recession, underwear is among the first things that people stop buying—because hardly anybody actually sees them. This creates pent-up demand, and so when underwear sales level off and increase, it should signal an uptick in consumer demand.

According to the underwear indicator, an old favorite of Alan Greenspan, there needs to be a return to 2 to 3 percent annual growth in sales in order to claim a recovery.

However, consumer research group Mintel predicted underwear sales will see a continuing decline of 2.3 percent this year and no recovery until 2013.

But NPD's outlook for underwear sales offers more hope for the economy. After a year long, 12 percent decline through the end of January, men’s underwear sales leveled off in February and March, according to NPD.

-Reported by Becky Quick, written by JeeYeon Park

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