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Increased sausage demand could be worrying signal on the economy

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Palmer, Alaska. Meat counter showing a variety of sausage at a Fred Meyer grocery store, a sub of Kroger. 

Michael Siluk | UCG | Universal Images Group | Getty Images

An uptick in sausage demand can offer the latest sign of consumers tightening their belts as they continue grappling with high prices.

There’s been “modest growth” in the dinner sausage category for one producer, according to the Dallas Federal Reserve’s Texas Manufacturing Outlook Survey released Monday. This underscores the trends of shoppers opting for cheaper products and pulling back spending all together as cumulative inflation bites into purchasing power.

“This category tends to grow when the economy weakens,” the respondent said, according to edited comments included in the Dallas Fed’s report. That’s because “sausage is a good protein substitute for higher-priced proteins and can ‘stretch’ consumers’ food budgets.”

This anecdote pointed out by eagle-eyed Bespoke Investment Group on X comes as grocery prices remain top of mind for consumers. While the rate of annualized inflation has fallen closer to levels deemed healthy by economic policymakers, the collective increase in prices compared with just a few years ago has left everyday Americans feeling sour about the state of the national economy.

Additionally, it bolsters two themes emerging as hallmarks of today’s post-pandemic economy.

A growing chorus of corporate executives, including those leading some of the largest restaurant chains, have warned that the consumer is starting to slowdown. In particular, they’ve pointed to stress on lower-income tax brackets as they attempt to make their dollars go further.

The shift to sausage also highlights an action experts call the “trade down.” Carefree customers may select protein that’s typically more expensive like steak or chicken. On the other hand, price-conscious shoppers will hunt for sausage or other lower-cost alternatives.

Other food manufacturers who responded to the Dallas Fed’s survey also raised concern about their economic health. One said agriculture as a whole was “hurting,” citing challenges from factors like weather and higher costs.

Another put it more plainly, saying it was “preparing for the recession.”

Economics

UK inflation September 2024

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The Canary Wharf business district is seen in the distance behind autumnal leaves on October 09, 2024 in London, United Kingdom.

Dan Kitwood | Getty Images News | Getty Images

LONDON — Inflation in the U.K. dropped sharply to 1.7% in September, the Office for National Statistics said Wednesday.

Economists polled by Reuters had expected the headline rate to come in at a higher 1.9% for the month, in the first dip of the print below the Bank of England’s 2% target since April 2021.

Inflation has been hovering around that level for the last four months, and came in at 2.2% in August.

Core inflation, which excludes energy, food, alcohol and tobacco, came in at 3.2% for the month, down from 3.6% in August and below the 3.4% forecast of a Reuters poll.

Price rises in the services sector, the dominant portion of the U.K. economy, eased significantly to 4.9% last month from 5.6% in August, now hitting its lowest rate since May 2022.

Core and services inflation are key watch points for Bank of England policymakers as they mull whether to cut interest rates again at their November meeting.

As of Wednesday morning, market pricing put an 80% probability on a November rate cut ahead of the latest inflation print. Analysts on Tuesday said lower wage growth reported by the ONS this week had supported the case for a cut. The BOE reduced its key rate by 25 basis points in August before holding in September.

Within the broader European region, inflation in the euro zone dipped below the European Central Bank’s 2% target last month, hitting 1.8%, according to the latest data.

This is a breaking news story and will be updated shortly.

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Economics

Why Larry Hogan’s long-odds bid for a Senate seat matters

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FEW REPUBLICAN politicians differ more from Donald Trump than Larry Hogan, the GOP Senate candidate in Maryland. Consider the contrasts between a Trump rally and a Hogan event. Whereas Mr Trump prefers to take the stage and riff in front of packed arenas, Mr Hogan spent a recent Friday night chatting with locals at a waterfront wedding venue in Baltimore County. Mr Hogan’s stump speech, at around ten minutes, felt as long as a single off-script Trump tangent. Mr Trump delights in defying his advisers; Mr Hogan fastidiously sticks to talking points about bipartisanship, good governance and overcoming tough odds. Put another way, Mr Hogan’s campaign is something Mr Trump is rarely accused of being: boring. But it is intriguing.

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Economics

Polarisation by education is remaking American politics

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DEPENDING ON where exactly you find yourself, western Pennsylvania can feel Appalachian, Midwestern, booming or downtrodden. No matter where, however, this part of the state feels like the centre of the American political universe. Since she became the presumptive Democratic presidential nominee, Kamala Harris has visited Western Pennsylvania six times—more often than Philadelphia, on the other side of the state. She will mark her seventh on a trip on October 14th, to the small city of Erie, where Donald Trump also held a rally recently. Democratic grandees flit through Pittsburgh regularly. It is where Ms Harris chose to unveil the details of her economic agenda, and it is where Barack Obama visited on October 10th to deliver encouragement and mild chastisement. “Do not just sit back and hope for the best,” he admonished. “Get off your couch and vote.”

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