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Forget oil prices and unemployment rates - you know the economy is in trouble when the so-called lipstick index soars. Leonard Lauder (chairman of cosmetics company Estee Lauder) coined the term when he argued that, in hard times, women seek out lipstick as a small indulgence. Signs that he's right: His company posted a 31% increase in profits last quarter, and cosmetics makers Ulta and Avon recently saw double-digit sales growth. While most department stores' overall sales are down the tubes, Saks and Nordstroms have reported that their beauty revenues are sitting pretty.

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Last updated December 30 2008: 6:26 AM ET
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