Are Current Beauty Trends Recession Indicators? It’s Complicated.

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If you're looking for a gut check on the health of the US economy, you could call up an economist, or you could ask a hairdresser.

Do you feel like the economy is good right now?

I'm nervous, honestly, I'm nervous for what's going to happen in the industry specifically.

That's Sydney Jackson Green. She's a cosmetology student who works at a salon in Springfield, Pennsylvania. She met her colleague Ben Steverman at a beauty industry trade show in New York earlier this spring and told him that recently business has been slowing down.

You know, I'm very young, and a lot of my clients Sele is young as well, so some of these outrageous prices is effecting business.

She does a lot of braiding and the supplies you need for braiding hair. The prices have gone up significantly.

Braiding hair has gone up probably at least like three dollars since I started doing hair. Now, if you need four or five packs for your hair now, it just went up twelve to twenty dollars depending on how much air you.

Ad Also, hair coloring, hair dye, those have gone up.

People still want their hair done, but now people are learning how to do it at home. I've had a bunch of at home disasters.

Her clients will call her because they've done something at home, like they've dyed their own hair and it just looks terrible, So then she has to fix it.

When it comes down to shampoo's conditioners, they're also increasing their pricing. So now when our client needs a deep conditioner, she's like, hey, can I get it next time? But that's your hair needs it this time.

To Ben Sydney's story felt eerily familiar. People trying to save money by skipping trips to the salon experimenting with DIY styles. If that brings up memories of the COVID nineteen pandemic, think back even further to the aftermath of the two thousand and eight financial crisis.

There was a hairstyle momana called recession hair. Supposedly, there's a trend of people getting lower maintenance cuts in the financial crisis.

Official economic data can be slow to reflect the actual state of the economy, and though Trump's tariff policies and the reaction to them have stoked fears of another coming recession. So far, key economic indicators are stable. The stock market has mostly rebounded from its dive of last month, unemployment hasn't gone up, and an April inflation rose by less than forecasted. The strongest warnings have appeared in data that reflect how consumers and companies are feeling about the economy.

The first thing you cut down on in a slowdown might be that facial or that massage.

Or that haircut. Today on the show, what beauty spending can tell us about the health of the US economy and what shifts in behavior at home and at the salon are signaling about where it's headed next. This is the big take from Bloomberg News. I'm Sarah Holder. Back in March, Ben Steverman went to a beauty show and cosmetics conference where he hoped to check the pulse of the US economy. Thirty two thousand spa technicians, hairstylists, colorists, and makeup artists were there too.

It was two giant rooms connected by a tunnel, and on one side with all the spa stuff, and on the other side was all the hair stuff. And you would go buy these boots, and some of them were quite elaborate. They would have demonstrations going on where where they're putting goop on people's faces or they're cutting hair as a demonstration. It was one hundreds thousands of different products being sold and it was fun.

What kind of mood were you picking up there? Was it jubilant? Was it anxious?

It wasn't that they were in a bad mood. It was only when I asked them about how's business that they told me things that were a little troubling.

Ben met a woman who does eyelash extensions and hair coloring in Brewer, Maine.

I used to have a lot of like bleaching tones, whereas now they're kind of going for that lived in moment so they can go longer between our appointments.

The more natural the hair color, the less obvious it is if you haven't had your hair dyed in a while. Ben also talked to an executive at a New Jersey based skincare company that's recently launched mini versions of its products.

The price point was better, So I think having that as an option for people, they can still be entered into our product line without having to spend xt amounts of money.

So and he met a massage therapist in Northern Virginia with a lot of federal government workers as clients.

It's feeling on like two thousand and eight with the market crash and everybody not knowing what to do, and so they don't want to spend that access money.

I was hearing this from Okay, here's this person in Manhattan, and here's this person in rural New Hampshire, and they're saying the same thing. That was really interesting. The people who'd been doing this for decades, they were the ones who said, this feels like other slowdowns I've been through in my career, and I'm worried.

In spas and salons across America, beauty professionals are noticing clients cutting back and shifting their spending in the age of teriff related uncertainty, and beauty companies are noticing too.

There's some indication that the major cosmetics companies expect at least a little bit of a slowdown in the coming year.

That's Newman, a reporter on Bloomberg's Consumer team. She writes about the beauty and cosmetics industry, an industry that's experienced a massive surge and growth worldwide in recent years. Between twenty twenty one and twenty twenty three, industry analysts estimate that the global beauty market grew by up to eight percent, but that trajectory could be changing.

The CEO of Looreal so one of the biggest beauty companies in the world, he said last month, so in April, that expects the beauty category to grow globally like four to four point five percent, and that was on the slightly lower end of what they had been expecting. I mean, this is not just lorel this is globally, So that just gives you a sense, like four to four point five percent, it's still really really good.

Growth, but it's a slowdown in that growth exactly.

It's a slow down in that growth.

The Lorel CEO said that this year his growth prediction was on the lower end because of a slower than expected American market, and he said it didn't even account for how quote inter national turmoil and tariff wars could

What they're really more worried about is that consumers seeing all of this talk of tariffs, concerns about higher prices, concerns about a potential recession in the US, will pull back on their spending.

Over the past few years, highly involved multi step multi products, skincare and makeup routines have been on the rise. It all started during the pandemic, when people were stuck at home with time on their hands, sharing beauty tips on TikTok How I do my barely there glowy MAKEOVERROUTEAE. This is quite twenty nine years and you just pack it into your skin.

Now most people use one prima I use.

Three, but Jeannett says there are signs that trend could be moderating.

So, for example, setting sprays have been declining in the past couple months, and some of the analysts I spoke with think that that is in part because people are starting to kind of cut some of these steps out of their of their routines.

Certain products could be more vulnerable to getting cut than others.

There's some incipient signs that we're seeing that people can prioritize their spending on kind of better and fewer products. Loloreal reported their earnings recently and their higher end offering actually did really well, better than their mass market products.

And while some people are choosing to invest more in the products they do keep buying, others are willing to downgrade. According to data from a beauty industry research group called h Intelligence.

What we've been seeing recently is that kind of less expensive versions of fragrance are becoming more popular, and this is potentially in reaction to just consumers saying, hey, I'm worried about potential recession, higher prices, I'm going to watch my wallet. So things like roller balls, which are cheaper versions of fragrance dupes, have continued to go from strength to strength.

So it could be mid tier products that suffer the most as people continue to buy the higher end stuff and cheaper dupes or knockoffs. This is something Ben realized at the trade show too, that even in hard times, it's unusual for people to stop moisturizing entirely or go

Be beauty is discretionary, but I think to a lot of us it feels a little bit less discretionary than some of these other categories.

That's Janette Newman again.

We're talking about discretionary spending, meaning things that you don't have to buy, but the lotion that you might use every night feels a little bit more like a have to buy than a piece of a skirt or a T shirt. So that's one reason that it's actually quite a resilient category in times of downturn.

So beauty spending is discretionary, especially when it comes to services like massages and spa treatments, but it's also resilient to economic shocks, and some products and services are more resilient than others. Ben Steveerman says it's a dynamic that showed up in paws downturns during the post nine to eleven recession. Leonard Lauder Than, the chairman of the board of Estay. Lauder famously shared that lipstick sales had spiked.

The idea is that there are certain luxuries that people stick with because it makes them happy and it's something that is a relatively inexpensive way to have something that gives you some pleasure. Just because we're in a slow down doesn't mean everything slows down.

Lipstick wasn't exactly a COVID era winner, remember all the masks, but the pandemic's economic disruptions made people invest in other small self care luxuries like skincare, and now in our current era of economic uncertainty, Janette says, data from Dash Intelligence shows that a different set of beauty products are having their own sort of lipstick effect, seeing their sales increase as other slow down at home salon replacements.

Artificial nail sales are up about thirteen percent in March versus February, and the growth has also been incredibly strong year over year, and we're also seeing strong increases in sales of color and bleach. So some signs that people are doing some of these things at home rather than going to salons with the same frequency.

And some of the people who've continued going to the salon are choosing lower maintenance treatments. Industry analysts say when it comes to hair dye, for instance, they're expecting to see more natural roots, warmer hues, and fewer blondes.

There's a term called procession blonde, which I think is maybe a TikTok term that people can kind of shift the coloring of their hair to make it easier to take care of. So if your roots start to come in, you don't have to go to the salon within like a week. You could wait a little bit longer, and so that keeps your costs down. And these are different theory that are kind of I think fun to debate. Are these economic trends or just beauty trends?

Right?

Beauty trends kind of come and go. Are some of the things that we're seeing because trends are just shifting or is it that they're pushed kind of by the economy?

Right?

The at home nail kits might be cool and trending on TikTok et cetera, in part because they're a little cheaper. Exactly exactly, So, does a rise and do it yourself manicures mean the market's about to crash? Does more at home bleach mean recession hair is officially back? Well? Ben and Jinette didn't go that far, but they both said that in corporate earnings reports, conversations with sources, and cultural trends,

They have a lot of leverage to work with their suppliers and for example, on their higher end products to raise prices.

It could be tougher for smaller players, like some of the people been met at the Beauty Convention, those salons and companies that are less able to quickly rework their supply chains to deal with new tariffs or adapt their product offerings or scales of production based on consumer spending.

This is an industry that has been growing pretty strongly coming out of COVID, and so you hope that some of these businesses that started up, and there's hundreds and thousands of new businesses have started up in this area, you hope that they can survive it.

Bloomberg Intelligence has been running a survey of American consumers over the past few years, and this January, almost half of the one thousand respondents said they'd cut back on other purchases before scaling back on beauty and personal care spending. But that's actually lower than the number of respondents who prioritize beauty spending in twenty twenty four and twenty twenty three. In other words, after so many years of pandemic fueled growth,