Wake up - Maxi skirts are back and so is a Recession!
How fashion trends can predict the state of the economy, recession indicators, and trends I'm predicting for the likely economic crash.
Recession, tariffs, inflation - all words dominating the media sphere in the past few weeks. In March 2025 the S&P 500 has documented its worst month since Dec 2022, Trump’s tariff war, alongside ongoing global conflicts, have all fed into fears of an international recession.
However, for those of us who study fashion trends rather than Trading212, there have been notable recession indicators for a long time.
1. The return of the Maxi Skirt - Hemline Index
Coined in the 1920s, the ‘hemline index’ theory asserts that the lengths of skirts and dresses become shorter during periods of economic growth, and longer during a decline or recession. The argument is that during economic growth, societal attitudes change from conservative to liberal and expressive, reflected in hemline lengths.
Whilst this theory is controversial, there’s no denying specific correlations associated with this idea.
For example, in the US mini-skirts were all the rage in the 1920s, before falling to longer lengths during the Great Depression. The trends shifted to knee-length during the end of WW2 (alongside the hope for a growing economy), before maxi skirts came back parallel with the 50s recession. With the slow and steady economic rise from the 60s-80s, the iconic ‘minis’ dominated fashion before midi-skirts popped into popularity in the late ‘80s, corresponding with the 1987 stock crash. Notably, during the 2010s, denim maxi skirts were booming in popularity, reflecting the 2008 financial crisis.
Some quantify the theory by suggesting that hemlines are driven by fabric manufacturers rather than designers. This argument is that during economic decline, women often become conservative with new clothing purchases, so manufacturers are left with excess fabric. Therefore, the longer hemlines trend during economic decline is due to wanting to sell more fabric per purchase. However, many critics argue that this could be more driven by the cyclical nature of fashion trends rather than an indication of the economy. However, the correlation between societal politics, the economy and hemlines is strong.
Fast forward to 2025 - no denying maxi skirts are all the rage and short skirts will leave. Even during Coachella (arguably the event where music meets fashion), celebrities such as Kendall Jenner, Paris Hilton, and Charli XCX rocked longer hemlines, contrasting their mini skirts in previous years. Even hemlines with jeans/shorts have lengthened, with ‘Jort’s’ becoming viral and Emma Chamberlain rocking an over-the-knee short at Coachella. Many surprisingly opted for Jeans, a longer hemline, unusual for previous Coachella fashion. Maxi skirts and midi dresses have dominated summer 2025 styles, atypical for summer fashion, as with hot weather approaching, popular Western styles tend to show more skin.
2. The Lipstick Index - boost in small luxuries
The Lipstick Index, coined by Leonard Lauder of Estée Lauder, noticed sales of small affordable luxury (such as lipstick, nail polish, etc) boosted during the early 2000s following the dot-com bubble burst.
The claim is made that affordable indulgences have a positive psychological impact during stressful times, so in a gloomy economy, consumers will curb discretionary spending but continue to buy lipstick and other small, affordable luxury goods. As Deepti Nagulapally, Behavioral Science Specialist at J.P. Morgan Private Bank noted: with cosmetics, you tend to wear them daily, so “when big things are out of reach you naturally go for little things”. This phenomenon was noticeable more recently, during the 2020 peak Covid economic fall. Estée Lauder's CEO Fabrizio Freda announced that moisturisers had supplanted lipsticks as an indicator of economic health, as customers were wearing masks – "but the concept of the index is still there".
Interestingly, the rise of ‘Skinification’ in the beauty sphere took off post Covid-19 Lockdown, with many Skinfluencers growing rapidly on social media. As said in Cosmopolitan: “For once, we weren’t seeing each other in person—or venturing out of our homes—and our focus quickly shifted from creating the perfect cat eye to curating the most effective and restorative skincare routine.” Many expensive skincare products were trending, such as Drunk Elephant and Tatcha, heightening this theory that affordable everyday indulgences trend during economic decline.
Psychologically, (especially us Gen Z) love to spoil ourselves for a job well done, like getting a Matcha as a pick-me-up reward for a long day at work. Knowing there’s a small reward, it helps us get through whatever struggles we’re going through. This is a collective thought, as a third of the UK makeup buyers claimed they have purchased a cosmetic product to “treat themselves” in the past year.
3. Recession Blonde - the brunette index
With the contradictory named Old-Money Blonde trending on TikTok, the Recession blonde hair colour is back in the mainstream. Recession blonde is described as a lived-in darker blonde with grown-out muted brown roots among golden hues. According to data from Launchmetrics, the media impact value for keywords “recession hair,” “recession blonde” and “recession brunette” grew 96% from February to March 2025.
The upkeep for blonde hair can be quite the investment and oftentimes the more expensive option, so it’s no surprise during economic decline that muted, natural hair colours come back into style. “During hard times, hair tends to be put on the back burner,” hairstylist Jordan Ware told Allure. The maintenance cost for ‘Recession Blonde’ would be vastly lower, and often achievable at home rather than in a Salon. Even haircut styles have changed, with the desire for “structured cuts that retain their original shape as they grow out” increasing, to lengthen the time between haircuts. In general, the demand for beauty services has lowered significantly ‘from seven or eight years ago’, with Google searches for “press-on nails” in the US increasing by 10% since February.
4. Office-core siren - fake it ‘til you make it
In 2024/25, there’s been a revival of the 2010s Officewear casual fashion trend, now devised as ‘Quiet Luxury’ or ‘Office-Siren’ in 2024/25 on TikTok. Stella McCartney stated her Autumn/Winter 2025 collection theme was '“from laptop to lapdance”, and corporate casual outfits were one of the biggest trends this season. As Vogue Business states: “The return of business casual to the club is a recession indicator”.
The trend subconsciously makes the individual appear more sophisticated and wealthy, which can hide economic struggles and act as a ‘fake it til you make it’ mentality. Additionally, the trend’s staple pieces act more versatile, lowering the need to invest in different types of clothes for all different occasions. The quiet luxury aspect: the subtle, logoless ‘Old Money’ viral aesthetic also adds an ease to partake in.
A popular Instagram account (databutmakeitfashion) studies the economic data linked to fashion trends. In her 20th March 2025 post, she noted that maxi skirts are up ‘+393%’, lipsticks by ‘+108%’, corporate fashion by ‘+39%’, and minimalist fashion by ‘+38%’ - highlighting all these as recession indicators.
My fashion predictions for 2025/26:
Shorts, skirts, and dress hemlines will continue to lengthen in style, alongside the continuation of ‘Trad-wife’ and ‘Conservative-core’ fashion styles.
Brunette and ‘grown-in’ hair colours will trend, with easy grown-out haircuts such as blunt bobs and loose layers.
Continuation of office-core, monochromatic and demure outfits.
Smaller, more affordable and accessible luxuries will trend rather than large purchases (e.g. Dior Lip Oil instead of Kelly’s, and Coach popularity vs Chanel decline). Perhaps skincare/beauty focused like previously.
Increasing desire for dupes (and perhaps fakes à la DHGate or a trip to Türkiye).
Heels will get taller as the economy declines- say goodbye to the kitten heel! (Thanks to the Heel Index).
Budget-saving DIY fashion/beauty trends will rise to popularity.
Return to more ‘natural at home’ beauty styles (e.g. natural-like hair colours done at home, press-on nails instead of acrylic, lashes at home, etc).
Minimalism and anti-consumption-core (the rise of No Buy Year trending).
