Is the Big Mac Empire Under Threat? Discover the Impact of Recession on America’s Favorite Burger!

Are we really in a recession? Well, not exactly, but maybe we’re headed towards a fast food nation in a downturn. According to Peter St. Onge from Heritage and Jeffrey Tucker from the Brownstone Institute, there’s an argument to be made that our economic output has been inaccurately measured, suggesting that we’ve been in a recession for the last four years.

Let’s take a closer look at the data and analyses presented:

• Various studies indicate that since 2019, fast food prices, often considered a reliable indicator of true inflation in financial markets, have increased by 25% to 50% more than the official Consumer Price Index (CPI).
• Could we use fast food prices to measure GDP instead? The evolution of the fast food sector within the CPI, compared to the GDP deflator and other CPI components, reveals some interesting trends.
• By examining the limited service restaurant prices, we see a faster rise compared to the CPI, although this is not necessarily the case for Big Mac prices, commonly used in studies on purchasing power parity.
• When analyzing different GDP measurements over the same period highlighted by St. Onge and Tucker, using Big Mac prices, real GDP seems to have been decreasing since the end of 2022, albeit from a higher baseline compared to GDP measured in other ways.
• If our entire economy revolved around fast food consumption, investments, public spending, and exports, then yes, we might have been experiencing a recession for the past four years. (Considering that fast food has a 2.5% weight in the CPI-U and assuming consumption makes up 70% of GDP, fast food consumption would represent around 1.8% of GDP.)

Taking all these factors into account, it’s clear that while we might not be in a traditional recession, there are interesting dynamics at play with the measurement of economic output and inflation, especially when using fast food prices as a benchmark. Perhaps it’s time to rethink how we gauge economic health and consider broader perspectives beyond traditional indicators.