How do we know if the economy is in decline? The answer might be on our lips. Estee Lauder chairman Leonard Lauder created the "lipstick index" during the economic downturn following September 11, 2001. He noticed that the purchase of cosmetics, particularly lipsticks, tends to be inversely related to the economy because women replace more expensive purchases with small pick-me-ups. In the fall of 2001, US lipstick sales increased by 11%. During the Great Depression, cosmetics sales overall increased by 25%. In 2020, at the height of the Covid economic downturn, Estee Lauder's CEO Fabrizio Freda said that the lipstick index had been replaced by a skincare item as customers donned masks and worked from home. "The lipstick index has been substituted with the moisturizing index," said Freda. "But the concept of the index is still there." Now we may be seeing that phenomenon rear its ugly head once more. The retailer Sephora recently announced a record sales year, and data from consumer research group Circana shows that prestige beauty growth has outpaced mass beauty sales, growing 9% and 2%, respectively in the first quarter of the year. Of course, the so-called lipstick index is a less technical — and more fun — measure of economic downturn and is not always entirely accurate. But as the free-spending post-pandemic party comes to an end in the US, it's something worth exploring. Before the Bell (the CNN business newsletter) spoke with Neela Montgomery, CEO of Overeon (a collective of premium cosmetics brands including BareMinerals and Laura Mercier), about the outlook for beauty in an uncertain economic climate in an interview below. Before the Bell: What do you see dominating the beauty market in the second half of the year? Neela Montgomery: Clean has become a real buzzword in this industry, but this whole idea of no-tox (anti-botox) remains a really important thing. The market is bifurcating between this very authentic, real look and people who are getting more cosmetic work done. What we see is a need for more of these kinds of efficacious products for people who don't want to go down the cosmetic procedure or injectables route. And then we continue to see that sort of clean girl with a pop of color look. So, you know, we have this sort of red lip…We continue to see that grow and expand.