The Lipstick Index
The Lipstick Index
By Emma Williams — September 18, 2025
The economy has a myriad of measuring tools to communicate what’s ahead, like the S&P 500 or the Dow, but what you may not know is that fashion is also an indicator of the future of Wall Street. On Aug. 25, Louis Vuitton released a “Luxury Lipstick” that could be yours at the high price of $160. Introducing: The Lipstick index.
The Lipstick Index is an economic theory that explains when consumers fear a recession, sales of affordable luxuries, such as makeup products, increase, according to JP Morgan Editorial.
This indicator is proof that when people feel instability lurking, they seek things to make them feel stable, like buying smaller luxury items. Companies capitalize on this consumer sentiment by increasing the price of their products.
“As inflation picks up and wallets are tightening, you want to make yourself feel better,” said Jeff Kreisler, head of behavioral science at J.P. Morgan Private Bank.
It’s safe to say that fluctuations in fashion trends, such as luxury items, are indicative of consumer attitudes.
Louis Vuitton isn’t the only one seizing this opportunity. Hermès prices have risen 40% since 2018, according to data analyst and founder of Data, But Make It Fashion,Madé Lapuerta.
Alo Yoga, a mass consumer brand, just dropped a $3,000 handbag, endeavouring to breach the luxury market. Could Alo’s jump up the ladder be an attempt to dodge the recession’s consequences and join in on the profits accumulated through new pricing strategies?
For years now, the luxury market has been in a slump, according to the Wall Street Journal, and fashion analysts are holding rental companies partially responsible.
Designer styles have become easily accessible to mass consumers through companies such as Rent-the-Runway and Nuuly. These renting companies provide luxury brands at affordable prices, allowing these designs to reach the hands of a market that they hadn’t before, reframing luxury in a way that is harmful for heritage brands.
“If they get it right, rental companies have a chance to reposition themselves as an essential extension of retail that reframes luxury as something to borrow, not buy,” said Vogue Business.
To evolve with these new mass-consumer vehicles, luxury brands use premium pricing to keep their exclusive reputation and reach a higher market. Luxury is changing: will the economy continue to change with it?
Next time you go to buy lipstick, you may want to turn on the news!
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