Sipping Through Economic Uncertainty

For many food is an art; for others, it’s an economic indicator.  When times are good, Americans spend on eating out instead of preparing less costly equivalents at home.  As the tide changes, diets tend to change.  Instead of frequenting venues with menus, consumers opt for more affordable, shelf-stable items like rice, pasta, beans, lentils, and oats, along with canned goods, potatoes, and frozen vegetables.  While there are not aggregate signs of this happening, there has been one noteworthy shift in the summer beverage of choice.  Introducing Spaghetts.  Ingredients: the Champagne of Beer and Aperol. 

According to this article from Business Insider, the concoction may be the “drink of the summer” for those with a stretched budget.  And either the previously initiated are drinking a lot more it, or a growing number of Americans are looking for a cheaper buzz.  The article indicates that receipts are up 65% versus last year and 1,000% since 2022.  Additionally, internet searches for the beverage have also spiked. 

July’s labor data was a surprise to many, but those ordering Spaghetts may not have been among the shocked.  Employment plays a crucial role in the state of the business cycle, so July’s slow growth coupled with large revisions to the prior two periods became a catalyst for concern.  While Atlas is not expecting a recession, economic slowing does seem plausible.  No need to fret though, there is also a growing chance that the Federal Open Market Committee will ease their policies.  As of this writing, the odds of a rate cut next month is nearly 90% according to the CME Group’s FedWatch. But that is for just a 25 basis point cut, and there was a zero percent chance priced in for cuts that are greater.  So if the Fed doesn’t deliver relief soon, at least Americans can toast their economic anxiety with a Spaghett and maybe a side of canned beans.