Can Spam Sales Indicate an Economic downturn?

spam2“This time an increase in Spam sales are being touted as a sign that people are suffering as they are being forced to trade in their fancy meats and poultries for something less expensive – a sign of “our times,” according to “NBC Nightly News” anchor Brian Williams.”- NewsBusters

“And in what may be a huge economic indicator, this may say more about our times than we realize,” Williams said on the May 29 broadcast. “Spam, the canned luncheon meat product, not the junk e-mail but, Spam sales have surged, lifting profits for the maker Hormel by 14 percent in just the first quarter of this year.”

So can spam sales indicate an economic downturn? The answer is… most of the time. Unlike most goods, Spam is known as an inferior good, which means that as income decreases the demand for Spam increases. This is different than most goods, which are classified as normal, because their demand moves in the same direction as income.

According to the Associated Press Spam sales were 10.6 percent higher in the second quarter of 2008 than the same period in 2007. This information confirms that the economy is in a downward spiral. Otherwise, people would not choose to buy Spam when they could afford better quality meats. So remember the next time you’re curious about how the economy is doing just check the sale of Spam and see if there’s any left in your local grocery store.


Published in: on November 18, 2008 at 10:17 pm  Leave a Comment  
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