When it comes to gauging exactly how the economy is faring, the long-held method has been to look towards the bare necessities. Turns out they don’t get much more bare than underwear. A theory first expressed in the spring when the economy was truly spiraling, the recent expansion of the men’s underwear industry could be telling us that the economy is on its way back.

Apparently Alan Greenspan of all people has been looking to this men’s underwear index for some time. In January, 2008, NPR’s Robert Krulwick first reported about how Greenspan would survey men’s underwear sales to see where the economy was going. Greenspan’s wisdom was that underwear was such a necessary expense that their sales remained constant. So the moment men’s underwear sales took a dip, you knew that something troubling was happening on main street. Well guess what happened in 2009?

According to global research company Mintel, American sales of men’s underwear experienced a serious drop of about 2.3%. This after the company had originally forecast 2.6% growth in the industry in 2009. And sooner than the average American male could drop his draws, the U.S. economy was tanking. But recent shifts in the industry demonstrate that America’s troubled, apparently underwear-less economy is back on the upswing.

Perhaps no company better indicates the sudden shift in men’s undergarments than Under Armour. The large sports apparel manufacturer who last year made a huge splash by jumping headfirst into a highly-competitive shoe market, has done it again this year with men’s underwear. The first big news was the signing of UFC champion George St. Pierre to be the face (although more likely the body) of their new underwear brand; the first such apparel endorsement for any mixed martial arts competitor. The multi-million dollar expansion from Under Armour almost immediately changes the face of an industry that traditionally has drawn from a small pool of primary manufacturers.

And just like that, the men’s underwear industry could be seeing a serious rebound from 2009. Industry leader Hanes is already forecasting an impressive 5% sales growth in 2010. And based on what we suddenly know about men’s skivvies and the economy, this could all be very good.