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What sausage sales tell us about the economy: Dallas Fed

In the Federal Reserve Bank of Dallas' latest report on Texas manufacturing, several producers issued dire warnings about the state of the economy and the consumer.

The Federal Reserve Bank of Dallas released its monthly Texas Manufacturing Outlook this week, which gauges the sector based on surveys of producers — and many of those manufacturers issued warnings in their feedback.

The report said the data shows weakness in the state's manufacturing, but it also included comments from respondents that were edited for publishing – and several sounded the alarm about the condition of the economy.

One food manufacturer alerted the Dallas Fed to a sign that consumers are struggling.

"As the economy weakens, we are seeing modest growth in our category of dinner sausage," the comment reads. "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."

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Another food manufacturer wrote, "Agriculture is hurting. No farm bill, weather and falling prices for our commodities while input costs increase are putting a big squeeze on our industry."

A third commented, simply, "We are preparing for the recession."

Machinery manufacturers also issued dire reports, with one writing, "The slowdown is settling in with business activity at a very low level." Another commented, "Things are just plain bad all over. There is no skilled labor available."

A number of producers expressed concern about the upcoming presidential election between former President Donald Trump and Vice President Kamala Harris.

"November cannot come soon enough!" one machinery manufacturer wrote. "We've stagnated as has our competition along with our customer base. It's like we all know the world will continue regardless of who wins, but we're all sitting on our hands until a winner is announced."

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Another commented, "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."

"It is increasingly looking like the U.S. has lost its position of strength in geopolitics, and the vacuum is encouraging war and violence, which pose significant risk to international trade and reduce opportunities for U.S. companies," another manufacturer reported to the Dallas Fed.

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The respondent added, "Anti-business, tax and spend rhetoric is not conducive for long-term investments and is going to further reduce U.S. business competitiveness especially against China’s government-supported industries and firms."

FOX Business' Edward Lawrence contributed to this report.

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