economic forecasts

This story from today's The Washington Post about the value of looking at sales of mens' underwear as an economic forecasting tool is almost certain to be the source of jokes and derision everywhere from The Daily Show to Conan O'Brien to the blogosphere.  Here's the money quote:

Here's the theory, briefly: Sales of men's underwear typically are stable because they rank as a necessity. But during times of severe financial strain, men will try to stretch the time between buying new pairs, causing underwear sales to dip.

Several questions: