I remember 2008 well, but not fondly. Often, I would find myself walking around downtown Boston midday, trying to clear my head of the packed red on the screen staring at me from my desk. On several occasions, I would walk into Macy’s and buy a tube of lipstick, which was something I found comforting. Considering that every lipstick I own, which is not a small number, is basically the same color, I also found that strange. Then I read about a phenomenon called the ” lipstick effect ,” which explains that when consumers feel strained, they tend to opt for more affordable luxury items instead of pricier ones. For instance, rather than purchasing a new $400 dress, they might choose to buy a $35 tube of Lancôme lipstick. How in the world does the lipstick effect relate to the persistently strong and increasingly unpredictable jobs numbers? Stay with me. We keep hearing about softness in some markets – construction, new homes, and used cars, for example – contributing to a constant drumbeat of recession-mongering. However, the September new jobs number came in sizzling hot at 336,000, much stronger than forecast. Almost 100,000, or 30%, of those jobs were in the leisure and hospitality sectors – hotels, restaurants and entertainment venues. We all understand the rationale behind the high demand for experiences following Covid, but it is almost 2024, and that appetite still feels insatiable. Let’s look at the top-grossing concert tours in the U.S. this year. Taylor Swift, Beyoncé, and Ed Sheeran have collectively sold $1.48 billion in ticket sales through August 2023, or $2.22 billion on an annualized basis, according to estimates from Forbes . Most of this came from U.S. tour venues. Top-grossing concert tours in 2023 through August Taylor Swift: $780 million Beyoncé: $460 million Ed Sheeran: $240 million Source: Forbes estimates Top-grossing concert tours in 2022 Bad Bunny: $373.5 million Elton John: $334.4 million Ed Sheeran: $246.3 million Source: Billboard Top-grossing concert tours in 2019 Ed Sheeran: $223.6 million Pink: $216.9 million BTS: $196.4 million Source: Billboard That compares to $954 million for the top three in 2022 and more than $600 million in 2019. The rate of change between 2019 and 2023’s annualized figures is well over 200%. Clearly, concert ticket prices have escalated rapidly, a factor that eminent media and entertainment Bank of America analyst Jessica Reif Ehrlich termed “funflation.” The average ticket price climbed 26% from 2019 to 2023, according to data from Pollster . Nevertheless, that pales in comparison to the total gross concert revenue ascent. Huge demand and more attendees have driven this sensation. Concert locations need to hire thousands of employees to handle these crowds to assemble site locations, direct fans, collect tickets, sell merchandise and provide security. These people are included in the hospitality job gains seen in recent months. In addition, could there be other factors beyond the post-pandemic urge to gather in person and the popularity of Taylor Swift and Beyoncé that contribute to this consumption wave? Since we are exploring where Americans spend their money, it’s worth considering what they are not buying. For starters, new home sales in August totaled 675,000, 8.7% below July’s revised rate, according to data from the U.S. Census Bureau . Existing home sales fell 2% in September from the prior month to a seasonally adjusted annualized rate of 3.96 million units, per the National Association of Realtors. Potential buyers of homes and cars who feel priced out by rates, might splurge on concert tickets for their children or themselves as a substitute luxury item. Home purchases require a hefty down payment, and those funds are now earning a decent return in the bank or money market. A $100,000 unused down payment, at a 5% rate, earns $5,000, enough for at least a couple tickets at scalpers’ outrageous prices. Similarly, among the cars that are purchased instead of leased, approximately 80% of them are obtained through financing. Waiting another year or two with the older model is much less costly than buying a new model at much higher rates. The lipstick effect might be scaling the heights from a mere $35 three-inch tube to a thousand-dollar four-hour experience with 50,000 other screaming fans. Karen Firestone is chairperson, CEO and co-founder of Aureus Asset Management, an investment firm dedicated to providing contemporary asset management to families, individuals and institutions.