The Federal Reserve Bank of Dallas has issued one of its regular surveys of manufacturers, and one small section may shed some light on how consumers are faring in the economy.
The survey covers a wide range of manufacturing activities, showing how different industries are dealing with their challenges. Several admit they are struggling.
One paragraph in the section on food manufacturing suggests consumers may be struggling as well.
“As the economy weakens, we are seeing modest growth in our category of dinner sausage,” the survey quotes food industry sources as saying. “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.”
Overall, the food manufacturing industry said it is preparing for a recession. But that might not help with inflation.
“Suppliers are demanding longer lead times,” the industry respondents said. “Some commodity prices have declined, but value-added items (packaging film) are seeing price increases. We’ll have an annual wage increase in October in the range of 3% to 8%. Wages for positions requiring physical work are increasing more than desk jobs.”
Other industries also see challenges
Other industries in the region are seeing signs of an economic slowdown. Machinery manufacturers say they see a slowdown settling in with business activity at “a very low level.”
Furniture manufacturers say retailers are taking longer to pay them. Even the computer and electronics industry appears to be “approaching a cyclical bottom.”
Early September will produce an employment report for August, and that may provide still more clarity about where the economy is headed. The Federal Reserve Open Market Committee will also meet in September and is expected to begin cutting interest rates for the first time in four years.