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<\/p>\nJust like a cardboard box traveling from factory to warehouse to doorstep, economic theories are being passed around, examined and repackaged. That unassuming brown cube has become a tool some economists are using to forecast whether a recession is on the horizon.<\/p>\n
Economists call it the cardboard box index. When box makers begin scaling back production, it can signal trouble ahead for the economy, according to Virginia Tech economist Jadrian Wooten.<\/p>\n
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Wooten points to the 2008 Great Recession, noting that today\u2019s slower box production and rising unemployment echo warning signs from that period.<\/p>\n
How a package signals demand<\/p>\n
So how can a simple cardboard box tell us about the economy? Every time a package arrives at your door, it\u2019s a tiny signal. About 75% to 80% of goods travel this way, according to Investopedia<\/a>.<\/p>\n \u201cThe cardboard box index is a surprisingly telling way to track the flow of the economy. Since the vast majority of consumer goods, from food to electronics, are shipped in corrugated boxes, changes in box production often reflect broader shifts in demand,\u201d said Chip Lupo, writer & analyst with WalletHub.<\/p>\n When businesses stockpile boxes, it\u2019s like the heartbeat of commerce speeding up. However, when the shipments slow and the stacks shrink, it can signal that the economy is taking a deep, cautious breath.<\/p>\n \u201cIt would suggest weaker demand in the broader economy. If shipments keep falling, other indicators like GDP or unemployment may eventually catch up,\u201d Wooten wrote in the Monday Morning Economist<\/a>.<\/p>\n