Spam Up, Bud Down

One pretty disgusting sign of the times and one sign that was completely unexpected.

From CNN Money...

Hormel Foods Corp. reported a higher-than-expected profit as recession-hit consumers turned to its Spam meat and Dinty Moore stew.

Hormel's canned foods "are really poised to shine in this kind of environment," said Edward Jones analyst Matt Arnold, since they are "very affordable meal alternatives."

Uh yeah, ok. I think I'd go vegetarian first.

Now onto the unexpected from Fivethirtyeight.com...

Beer, it seems, is no longer recession proof.

The chart above details the quarterly change in alcohol purchased for home consumption dating all the way back to 1959. We can compare this against the quarterly change in real GDP.

As you can see, there has generally not been much of a relationship between alcohol purchases and changes in GDP -- the correlation is essentially zero.

But something was very, very different in the fourth quarter of 2008. Sales of alcohol for off-premises consumption were down by 9.3 percent from the previous quarter. This is absolutely unprecedented: the largest previous drop had been just 3.7 percent, between the third and fourth quarters of 1991.

Beer accounts for almost all of the decrease, with revenues off by almost 14 percent. Wine and spirits were much more stable, with sales volumes declining by 1.6 percent and 0.9 percent respectively.