Consumer Spending Reports indicate how much consumers are spending each year. There is a huge spike in 2002 from the stock market recovering and the economy beginning to go on the upraise with promise for the future. This means that consumers have confidence in the economy and there jobs so they are spending money. This is a great time for the fashion industry because consumers have discretionary income.

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Hemline Indicator
On September 2008 an article in Money Week was ran entitled “Fashion Predicts the Future.” It discussed the correlation between skirt lengths and the state of the economy. The prediction is based off the theory of the hemline indicator; when times are bad skirt lengths fall, when times are good skirt lengths grow higher and higher. Some examples used in the article are the 50’s and early 60’s when skirt lengths were extremely short, then for them to lengthen in the 70’s, and again rise in the 80’s. Confidence is shown when a woman wears a short length skirt and there is a parallel drawn to confidence in the economy. At the other end of the scale a long length skirt indicates a more reserved feel, which would also be felt when facing a poor economic year. So how it is that fashion can predict these trends? It seems that going out into the world and observing people, nature, cities, and everything that has to do with real life gives great insight into the future of fashion and the economy.

In 2002 the economic status of the country was somewhat unstable. There had been a fall in July and September in the stock market caused by the economy still recovering from the September 11th attacks and a burst in the technology bubble. The stock market did make fast recoveries and restrictions being lessened from Fannie Mae and Freddie Mac made it easier to get a loan and money was being moved around. This is seen in the hemlines of woman’s skirts in 2002. There is even a slight variation is popular skirt lengths as there was a level of variation in the exact state of the economy. The theory seems to hit the nail right on the head. The skirt lengths all tend to flirt with the knee area, ranging from slightly below to a bit above the knee. This is interesting to me too because when the skirt lengths are bellow the knee they are just barely so but when they are above the knee they are higher then the ones that are bellow. This seems to predict a more confident stable economy in the future which does indeed take place.

To see photos of some of the popular designers hemlines from their 2002 spring lines Click here

Economy: Loans

Interview of a small Business owner in 2002. Robin and Randy DuBois explained how a loan was obtained, and they changes that were being made that lead to a time in the economy when business began to boom. When business is booming, money is moving around this creates security for people. The people who took out loans are able to pay them back because they have money coming in. Banks are able to continue to loan out more money because the people they already have loans with are able to pay them back. People are more comfortable spending money on things like fashion then they are in harder times when they can't be sure how much income they will be taking in.

Click here for interview

Economy-
Stock market drop:
- extreme declines in July and September
- last time it dropped this low was in 1997 and 1998
- started in 1/15/200 ended in 10/9/2002
- Very long recovery time, 10th worst crash in U.S. stock market history
- Cause: tech bubble bursting and September 11th attacks
Trade:
Trade Minister Mark Vaile
- “The European Union announced yesterday that it would introduce tariff rate quotas on steel imports of 15 steel product categories for six months. The EU is also investigating whether to impose definitive safeguard import restrictions after six months.”
- “The current issues facing the global steel industry need to be addressed in an orderly and coherent way. Australia’s steel industry has already undertaken extensive restructuring, and is now a competitive supplier. We support international efforts to rationalize uneconomic global steel capacity. But the introduction of import restrictions will only delay these efforts and make genuine restructuring more difficult to achieve.”

Commerce Minister Murasoli Maran: India:
- Import restrictions removed on 714 items
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- Special economic zones to be set up in Gujarat and Tamil Nadu
- 4 existing export processing zones to be converted to special economic zones
- Diamond traders allowed more foreign exchange
- Import of silk under a special license
- Second-hand capital goods less than 10 years old can be imported directly