Recession indicator? People are cooking at home at the highest level since COVID

What's for dinner tonight?
For a rising share of Americans, something they made themselves. That's according to the most recent earnings call for Campbell's, where the CEO of the food giant said they've seen more people opting for a home-cooked meal than they have since the start of the COVID-19 pandemic.
'Consumers are cooking at home at the highest levels since early 2020,' Mick Beekhuizen said Monday. Sales were up in the meals and beverages category for the company, which owns the canned soup brand as well as Rao's, Prego, Swanson, Pepperidge Farm, V8 and other grocery store staples. Specifically, spending in the U.S. was up for pasta sauce, broths, and condensed and canned soups.
Dave Chalk, Campbell's vice president of consumer insights for meals and beverages, said the company uses interviews with consumers and behavioral data collected by research companies to assess at what rate people are cooking at home.
'We have seen a shift to what we call 'stretchable' categories,' he said in an email. 'These are categories like soups used for cooking and also include rice, pasta, broths and Italian (pasta) sauce.' He said the company has also noticed consumers opting for premium products, like Rao's pasta sauces, that can help make a homemade meal taste more like it came from a restaurant.
Unfortunately, this behavior probably isn't a sign of a cultural shift toward healthy eating and thoughtful budgeting, said WalletHub managing editor John Kiernan.
'It's definitely not a sign of the economy doing great,' he said. 'People aren't going to be loading up on the staples and eating home far more often if they're feeling flush.'
Back in the early part of 2020, consumers were adjusting to lockdowns and limited grocery store hours alongside predictions of potential global economic collapse in the face of a novel virus. The economic policies that staved off that potential collapse — low interest rates, stimulus checks — instead pushed the U.S. and most other developed economies into a protracted period of inflation.
Exit polling in 2024 indicated many voters were persuaded by so-called 'kitchen table' arguments – the idea that President Donald Trump would bring down the price of eggs and other household goods. Instead, he's introduced several large-scale policies that aggravate inflation, including immigration crackdowns (which make grocery prices go up) and widespread tariffs (which make all prices go up).
A soup-buying boom could be yet another one of the 'recession indicators' we've heard so much about. Actually, according to a report released Monday by financial services company Morningstar, some of the classic economic indicators of a recession have cooled off — but it's hard to say whether the recent GDP contraction was a tariff-induced blip or a sign of things to come. A recession is technically defined as two consecutive quarters of GDP shrinkage.
From the perspective of a personal finance columnist, I don't think it's a bad thing for people to experiment with cooking at home, though I wouldn't recommend financing your groceries if you don't absolutely have to. Cooking at home is certainly cost-effective, as we found in a Chronicle analysis comparing identical meals procured via food delivery app, meal kits and good old-fashioned groceries. As someone who went through this journey myself, I can say that cutting back on dining out and learning to cook simple meals at home is both personally and financially rewarding.
Much of the U.S. economy is driven by consumer spending, and a lot of local economies rely on people going out to eat. But that's not your personal problem to solve. My 31-day Wealth Challenge newsletter dives into how to effectively meal plan, plus lots of other tips to cut spending and up your savings. You can sign up below:

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UPI

19 minutes ago

• UPI

Analysis: Business model of Asia's top private equity fund questioned

Kim Yeong-hee works at a Homeplus Geumcheon branch. Late last week, MBK vowed to write off its entire stake in Home Plus to facilitate the company's corporate rehabilitation photo by Jeon Heoo-Kyun/EPA-EFE SEOUL, June 20 (UPI) -- Michael Byungju Kim, who worked at Goldman Sachs and the Carlyle Group, founded MBK Partners in 2005. Over the next two decades, he built it into one of Asia's leading private equity funds through aggressive mergers and acquisitions. It now manages up to $30 billion in assets. However, Chairman Kim and MBK face challenges, because of its major investments in Home Plus, South Korea's No. 2 discount chain, and Lotte Card, the country's fifth-largest card issuer. This prompts experts to question the business model of the buyout fund. Late last week, MBK vowed to write off its entire stake in Home Plus to facilitate the company's corporate rehabilitation process. The firm stated that "All $1.8 billion worth of common shares held by MBK in Home Plus will be canceled without compensation." This means that MBK is ready to walk away from the Home Plus investment empty-handed, although it poured billions of dollars to take over the supermarket chain. In 2015, MBK acquired Home Plus from Tesco in a $5.1 billion deal financed through a combination of equity and debt. But the rise of e-commerce and the impact of the COVID-19 pandemic severely undermined its performance. Since 2021, Home Plus has reported losses for four consecutive years, and its debt-to-equity ratio surged to nearly 500% this year. It filed for corporate rehabilitation in March, and MBK eventually decided to relinquish all management rights and claims while receiving nothing in return. Yet, MBK is under pressure to do more, as the National Assembly Speaker Woo Won-shik noted during his visit to a Home Plus outlet in Seoul on Wednesday. He accused MBK of showing an irresponsible stance. "The livelihoods of some 100,000 people, who are directly and indirectly employed by Home Plus, are now at risk. The damage is already severe," Woo wrote on social media. "Even after initiating rehabilitation procedures, MBK failed to assume responsibility, instead shifting the burden to workers and merchants through delayed payments, asset sales, and store closures," he added. Woo hinted at potential legislative action, including a parliamentary hearing and new regulations targeting private equity funds. Lotte Card up for grabs There are other crucial tasks for MBK and its Chairman Kim, particularly regarding Lotte Card. In 2019, MBK partnered with Woori Bank to channel $1 billion for a 79.8% interest on Lotte Card. MBK holds 59.8% and Woori has the remaining 20%. MBK tried to sell its stake in Lotte Card in 2023, but failed. The fund strives to divest its stake once again by reportedly sending teaser letters to multiple potential bidders, including Hana Financial Group, last month. UBS is managing the sales, with preliminary bids expected to open as early as mid-July. It remains to be seen whether MBK will be able to dispose of Lotte Card this time. But the sale price is predicted to go down due to the recent setbacks of the company. Lotte Card's net profit for 2024 more than halved to $100 million compared to $269 million in 2023. During the first quarter of 2025, it netted $10 million in profit, down 42.4% from a year before. Two years ago, MBK reportedly hoped to secure at least $2.2 billion for its stake, but the price is feared to decrease substantially now, which may significantly reduce MBK's potential profit. "MBK's business model has been very successful over the past 20 years as shown by the fact that its founder Kim has become the wealthiest man in the country," Seoul-based consultancy Leaders Index CEO Park Ju-gun told UPI. "But, its business model is now being put to the test. The company would have to worry about its damaged reputation and growing political momentum for regulating private equity funds," he added. In the 2025 Forbes billionaire list, Kim was second to none among South Koreans with $9.5 billion in wealth, surpassing $8.2 billion of Samsung Electronics Chairman Lee Jae-yong. Park expected that the country's unicameral parliament might introduce an act curbing highly leveraged buyouts and banning private equity funds from directly managing companies after acquisition. Seo Yong-gu, a professor of business administration at Sookmyung Women's University, echoed the concerns, although he opposed excessive regulations. "MBK has played a key role in developing Korea's capital market. But buyout funds have often been criticized for seeking short-term gains at the cost of long-term growth for a fast exit. We may need a reform," he said in a phone interview. "Highly leveraged acquisitions are also problematic. Still, I am against the idea of prohibiting private equity funds from managing their portfolio firms. It would fundamentally deny the very essence of the business," he said.

The Hill

36 minutes ago

• The Hill

How Trump's ‘big, beautiful bill' stacks up against his 2017 tax bill

As Senate Republicans deliberate modifications to the reconciliation budget bill that the House of Representatives passed on May 22, one thing looks increasingly clear. Namely, the all-encompassing bill that President Trump favors will likely be enacted in July, despite protests from some Republican senators on various elements of the package. In that case, it would become the signature legislation of Donald Trump's second term, just as the Tax Cuts and Jobs Act of 2017 was in his first term. So, how do the two bills compare? One of the major accomplishments of the Tax Cuts and Jobs Act was to make the U.S. corporate tax code competitive with the rest of the world by lowering the marginal tax rate from 35 percent to 21 percent. According to economists Kevin Brady and Douglas Holz-Eakin, it did so by making the corporate rate cuts permanent, which proved to be highly successful. They point out that economic growth and business capital spending accelerated after the bill was enacted, and the U.S. did not lose a single multinational headquarters following a decade of large exoduses. The legislation currently being considered, by comparison, is focused on extending cuts in personal tax rates that are set to expire at the end of this year. Proponents claim that if the personal tax rates expire, most Americans will face tax increases that could weaken the economy. Democrats, however, argue that the tax cuts in the Tax Cuts and Jobs Act primarily benefit the very wealthy rather than middle-class or lower-income families, and they favor boosting taxes on the wealthy and corporations. Jeff Stein of the Washington Post observes that to counter this, Trump pivoted during the 2024 campaign by proposing new tax cuts that were easier to sell to specific groups of voters. The proposals included an end to taxes on tips, overtime and Social Security, as well as a tax deduction on borrowing costs to buy American-made cars. Senate Majority Leader John Thune (R-S.D.) said the Republicans in his chamber expect to deliver on these campaign promises, according to Bloomberg. Stein points out that, in the process, there has been a significant change in the way the Republican leadership views tax policy since Trump's first term. Most of the policies in the 2017 law were developed over the course of many years by think tanks in Washington, with former House Speaker Paul Ryan (R-Wis.) and former Rep. Kevin Brady (R-Texas) serving as the principal architects. Their overriding goal was to simplify the code and lessen distortions without adding to budget deficits. In comparison, the current Republican approach to tax policy is more populist-oriented and designed to provide tax relief to select groups of voters. Politico reports that Republicans are piling on new tax breaks in hopes of boosting tax refunds ahead of next year's midterm elections. The provisions include a larger child tax credit, a larger state and local tax deduction and others that would be made retroactively. One challenge is that the extension of the 2017 tax cuts and the new initiatives are estimated to cost the federal government about $4 trillion over the next 10 years. Accordingly, there is little chance that the budget deficit will be brought under control, with spending cuts of only $1.5 trillion below current projections contemplated over that period. Another concern is that the tax cuts in the bill passed by the House are less oriented to promote long-term growth than the Tax Cuts and Jobs Act was. The Tax Foundation estimates that it would increase long-term GDP by only 0.8 percent (not annualized). It states that, 'by introducing narrowly targeted new provisions and sunsetting pro-growth provisions like bonus depreciation and [research and development] expensing, it leaves economic growth on the table.' Senate Republicans are trying to address this by including more permanent business tax cuts and full expensing for equipment and research and development in their version of the bill. The Wall Street Journal Editorial Board argues that one of the most constructive changes in the 2017 bill was letting businesses immediately deduct the full cost of capital outlays rather than spread them out. It boosted capital spending until full expensing was phased out in 2022. Another critique relates to fairness. The Center on Budget and Policy Priorities contends that the House bill is skewed to the wealthy, costs more than extending the 2017 tax law and fails to deliver for families. It concludes that instead of changing course and prioritizing people with low and moderate incomes, the tax bill only offers more of the same. When the impact of proposed Medicaid cuts is factored into the equation, the Republican bill is unpopular with the public at large. For example, recent polls undertaken by Quinnipiac, the Washington Post-Ipsos and KFF all show that a plurality of voters oppose the House bill, with many citing the attempt to pare back Medicaid funding. Finally, my take is that Trump is making the same mistake Joe Biden did by believing that all-encompassing legislation is better than more targeted bills that spell out clear policy objectives. The principal difference is that Trump favors a grab-bag of tax cuts and spending cuts, whereas Biden was enamored with massive spending bills. In my book about Trump's economic policies in his first term, my assessment was that investors would respond enthusiastically to the Tax Cuts and Jobs Act, which they did as the stock market rose steadily leading up to its passage. In comparison, the market's response this time is more ambiguous amid confusion about the objectives of the 'big, beautiful bill' and uncertainty about the global trade conflict. Nicholas Sargen, Ph.D., is an economic consultant for Fort Washington Investment Advisors and is affiliated with the University of Virginia's Darden School of Business. He has written three books, including 'Investing in the Trump Era: How Economic Policies Impact Financial Markets.'

Politico

37 minutes ago

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How the Israel-Iran conflict could hit the economy

Presented by As the U.S. weighs intervention in Israel's conflict with Iran, Wall Street has been skittish, eyeing the potential fallout for oil prices and inflation. To get a better sense of what's driving the oil market and what economic risks might lie ahead, MM caught up with Rory Johnston, an oil market analyst at research service Commodity Context who's been following all of this closely. A takeaway from that conversation: The price jump has been notably large for a market that has become desensitized to political risks after safely weathering multiple shocks over the last few years, including Covid and the Russia-Ukraine war. Now, 'even a numb cynical oil market sees Israel bombing Tehran and says, 'OK, maybe worry a bit here,'' he said. Conflict with Iran is the 'No. 1 risk scenario that people talk about, and now we're living in it,' he added. A worst-case scenario would be if Tehran is driven to close off the Strait of Hormuz, a channel through which about a fifth of the world's oil passes. Experts including Johnston say it's unlikely Iran would do that unless pushed to the brink — such a move would run the risk of hurting its own economic lifeline, as well as antagonizing its neighbors in the region — but the shockwaves would be significant. For now, what struck your host is that this conflict is helping prop up prices at a time when they'd really started to drop, and that could help boost U.S. oil production, which had previously been forecast to contract in 2026. But the exact trajectory of all this is highly unclear. 'This is usually the lead-up to summer driving season, so gasoline prices were set to rise anyway,' POLITICO's resident oil market expert Ben Lefebvre told MM. 'Because of the current Middle East situation, they'll rise further than they might have when oil was still around $60 a barrel. But when compared to what U.S. drivers experienced even last year, it won't be too far off recent norms … if there is such a thing as 'recent norms.'' 'The interesting thing is whether this spurs U.S. oil companies to drill more,' he added. 'They might just see this as a temporary boost and not something they want to get too far ahead of.' Rewind to before the current Israel-Iran conflict escalated. OPEC, the cartel of major oil-exporting countries, had been holding back production but then ramped up output earlier this year. That move was taken, in part, to get ahead of the effects of President Donald Trump's tariffs, which had raised fears that demand for oil would crater amid a global slowdown. That was leading to forecasts of oversupply later this year, Johnston said, reducing incentives for oil companies to produce. Now, Israel's attacks on Iran have likely led to fear-buying, as well as speculative trading, that has pushed up prices as much as 15 percent. Fighting so far has spared infrastructure that would significantly crimp the outflow of crude. 'While theoretically on its face, nothing that's happened so far has changed anything physical about supply and demand, part of the way … price formation has occurred is you have physical participants — a refinery, whatever — that's all of a sudden worried they're not going to be able to get cargos next month or the month after,' Johnston said. For prices to stay high or go higher, there likely would have to be some actual damage to key oil infrastructure, he said. But in the meantime, the scope for economic disruption is still significant. The largest price increases have been for diesel, a key input for shipping and therefore a potential risk to inflation in many sectors. 'It might not seem as harsh at the pump, but your shipping and your route delivery is going to feel the pinch of diesel far more,' Johnston said. More broadly, John Fagan, co-founder of Markets Policy Partners and the former markets head at the Treasury Department, said this oil price shock feeds the narrative that the U.S. is going to have slower growth and higher prices: stagflation. 'Demand is not collapsing, and oil prices are not unbelievably high, so you don't have that pop and drop kind of dynamic' when prices rise above where the market can support, he said. 'And if the dollar can't rally, that's supportive of [higher] oil prices.' HAPPY FRIDAY — Hope many of you got to have a restful day off yesterday. 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