The manufacturing Outlook Survey out of the Dallas Fed had all kinds of red flags in it, but none more telling than sausage sales.
Apparently sausage sales are a bit of a canary in the coal mine when it comes to the economy.
A wonderful, delicious canary in the coal mine.
Here is a comment from a food manufacturer on the survey:
As the economy weakens, we are seeing modest growth in [the] category of dinner sausage. This category tends to grow when the economy weakens, as sausage is a good protein substitute for higher-priced proteins and can 'stretch' consumers' food budgets.
Who knew sausage was such a key to financial prognostication?
Some other comments in the survey were almost as concerning as the sausage. Here are a few:
Turbulence in the market, increased global instability and further concerns over U.S. political instability in the current administration have all fueled further weakening in the market.
Heading into the holiday season with an election in the near future, our customers are beefing up supplies from China for the near term but hitting pause beyond that.
Incoming orders continue their downward trend. Most of our customers are reporting few orders on their end, especially our building and construction customers, as well as the ones in the transportation segment (trailers). We continue to be negatively affected by foreign competition at much lower price offerings than we can meet.
We are experiencing slower pay on accounts receivable. There is a continued shortage of skilled carpenters and saw operators. Project size has increased from general contractors. Inexperienced architects and construction project managers cause significant construction timeline delays.
Things are just plain bad all over. There is no skilled labor available.
We are getting more resistance to higher prices from our customers. We are also seeing orders reduced or delayed from a few of the more price-sensitive ones. The biggest uncertainty is about the election; a lot of our customers are taking a 'wait and see' approach. All small business owners that I talk to are very concerned about the high-tax, anti-growth and anti-small business policies that [we think] are certain to come from a [Kamala] Harris presidency.
And finally, one respondent said the thing no one wants to hear from industry leaders out loud:
P.S. Now check out our latest video 👇
