If you're looking for clues about the direction of the economy, consider the Lipstick Effect. The theory holds that lipstick sales go up during times of economic uncertainty. When women begin to spend money on little luxuries like lipstick instead of, say, a pair of Jimmy Choo shoes, you can bet consumer confidence is falling fast.

The Lipstick Effect -- first observed by Leonard Lauder, son of Estee and former chairman of the cosmetics company that bears his mother's name -- has been considered a pretty reliable way to gauge spending and the economic mood. Lipstick sales doubled, for example, right after the Sept. 11 attacks, in keeping with Lauder's hypothesis.

So what is one to make of the fact that sales of nail polish overtook lipstick sales in the throes of the Great Recession? According to market research on cosmetics and toiletries, U.S. lipstick sales declined by more than 5 percent in 2009, while sales of nail polish grew 14 percent.

Analysts have some plausible explanations for the sudden popularity of nail polish. Nail polish manufacturers, for example, broke out their pink-and-red rut and began selling polish in almost every color of the rainbow, a marketing strategy that boosted sales and led to new forms of creative expression in nail art. The colors of choice happen to be blue and neon orange, though we have seen plenty of dark forest green, black, and all manner of color combinations. At the same time, consumers went the DIY route, buying their own polish and forsaking nail salons and professional manicurists.

OK, but we think the Nail Polish Effect bears further scrutiny. If more women (and perhaps men, too) are favoring nail color over lip color, something's going on. We have our own theories. The spike in sales may prove to be a leading indicator for a jobless recovery, which appears to be a new and unwelcome economic phenomenon. Note that the double-digit growth in nail polish sales occurred the same year that the National Bureau of Economic Research declaimed the recession over and done with. Well, that was news to all those out-of-work people with time on their unadorned hands. We suspect a sizable proportion painted their nails, an activity that absorbs more hours in the day than a quick application of lip color.

Or perhaps it's a sign that home sales are unlikely to rebound. As anyone who's ever had a manicure knows, no one with wet nails is about to pack up the dishes and put the house on the market.

Then again, maybe the nail polish craze has something to do with America's debt crisis. The direct connection isn't entirely clear, but if red makes a comeback, the country’s in for deeper trouble. Expect hemlines to fall, aspirin sales to rise and all other economic theories to go out the window.