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How you'll know the economy is turning around

Experts watch a variety of indicators both subtle and significant – from the sale of home hair-dye kits to the volume of used-car purchases.

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Purchases of big-ticket consumer items like cars and washers, trends in the stock market, and manufacturers' inventories are a few of the "leading indicators" that economists watch for signs of an economic upturn – most of which remain gloomy. But every economist has a favorite benchmark. Here are a few – both subtle and significant – we encountered in a survey of experts.

Home hair-dye kits

When people are curtailing spending, they color their hair at home and forgo trips to the salon. Procter & Gamble reports that sales of its home hair-dye products have been surging.

Sofa index

Consumers still aren't buying new ottomans, Mission-style coffee tables, and other furniture in great numbers, indicating an enduring softness in consumer spending. National home furniture sales in February ticked up a modest $100 million over January, to $8.5 billion.

Housing starts

A return to housing growth would be one of the strongest signals that the worst is over. Construction of new homes and apartments jumped 22 percent in February over January, though that's still 47 percent below a year ago. More telling, building permits applications rose 3 percent. Still, the National Association of Home Builders' housing market index was at nine in March – one point above the all-time low. Is the bottom near? Maybe.


Trips to the corner coffee boutique, another sign of consumer sentiment, continue to fall. Sales at US stores dropped 10 percent in the first quarter of 2009 over a year ago.

Used-car lots

When sales of used cars start to slow, it often means people are considering buying new vehicles again – a good sign. For now, "pre-owned" sales remain robust: Analysts at indicated in mid-February that some 511,000 used cars sold in the previous three months would have been new car sales in a "normal" economy.

Dining out


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