America's "Sausage Fest" Indicates Looming Recession According to Dallas Federal Reserve...

Two things: #1. I’ll never look at sausage the same way ever again, and #2. Who knew an uptick in sausage demand equals “Oh sh*t” the economy is slowing?” 

(Source: Giphy) 

Well, apparently that’s the case as the Dallas Federal Reserve's Texas Manufacturing Outlook Survey (geez, say that three times fast), just sealed their 15 minutes of fame as they’ve recently came out with a stunning report showing sausage demand having a strong correlation with bad times ahead. See: “Pork Cut Out Future traders waiting their whole lives for this.

In short, according to the survey, dinner sausage is experiencing what they’re calling “modest growth as it’s becoming the go-to protein when your bank account is looking more like a horror show than a happy ending. 

(Source: CNBC) 

Which makes sense, considering one producer states that “This category tends to grow when the economy weakens” due to the fact that sausage is a cheaper protein alternative to its steak and chicken counterparts. Meaning when consumers start swapping out their prime rib for a pack of bratwurst, it’s a clear signal that discretionary spending is tightening - heavily. 

(Source: Wealth Professional) 

Now obviously, this report surfaces in the media at a time when everyone and their dogs are waiting anxiously for J-Poww to do the deed (cut rates) in September, but the tight wallets in our country are still undeniable. Sure, inflation seems to be about as wrangled in as Glen Powell wrangles ‘dem tornaders - but, prices are still high enough to make some consider that second mortgage when strolling through the meat aise.

(Source: Imgflip) 

Whereas, according to experts, this is becoming a classic example of the “trade-down’ effect. For instance, I’m eyeing that juicy ribeye on the meat aisle, but then I remember my credit card bill looks like the national debt. Enter sausage, stage left—the “Great Value” protein that keeps me and my family fed without forcing me to sell a kidney. This is the exact scenario that most Americans are feeling in the grocery aisles. 

However, it’s not just consumers that are feeling the pain from the uptick in “sausage parties”. Other food manufacturers came out of the woodworks post-Survey to express their own concerns about their economic health, as another said it was “preparing for the recession”.

(Source: Business Insider) 

This impact also started to show its roaring head in Mcdonald’s most recent earnings call as they made mention that lower income customers are turning away from eating out amid high prices, leading the fast food giant to focus on its $5 value meal.

(Source: Fortune) 

Meanwhile, companies like Walmart and Ross Stores, are seeing a tremendous amount of revenue numbers (think +4.77% YoY growth for Walmart and +7.15% YoY growth for Ross Stores), due to the mass momentum of cheaper purchase options. 

So with all of that said, while inflation rates have simmered down since their 2022 boiling point, it’s clear that consumer wallets are still feeling “rekt” these days. But again, with a rate cut up ahead, this may change in future surveys. 

(Source: Giphy) 

But who knows, at least now I know that the last time I opted for sausage over steak, I was participating in a real-time economic experiment. Which is cool, I guess. In the end though, it’s good to be aware of smaller economic factors that indicate turbulent times ahead, because when most wait for the major indicators to occur - well, then it’s likely too late to prepare. 

So for now, take note of America’s sausage fest, and keep your eyes peeled for Nvidia’s earnings release after market close today.Hell, depending on that, Wall Street may be opting in for more sausage as well. 

(Source: Giphy) 
 

Stocks.News holds positions in Mcdonalds and Walmart as mentioned in the article.