Many American households struggle with inflation, particularly during Thanksgiving, as each home prepares for an expensive holiday.
In the US, Thanksgiving is when many families gather to commemorate a historical event. Many homes host the event and prepare different dishes, turkey being the most popular. However, compared to a year earlier, the cost of wholesale turkey increased by 23%. Consequently, purchasing a turkey demands a considerable portion of the holiday spending budget. Additionally, the cost of potatoes and cranberries went up.
The market has seen price increases on several products due to many factors, including rising energy prices, a workforce shortage, and climate change. All of these elements have an impact on both the animal population’s general health and agricultural harvest. The Labor Department reports that food prices rose 12.4% over the previous year.
At the moment, the US inflation rate is 7.7%. Given the magnitude of price rises, Wells Fargo’s head economist Michael Swanson predicts that families will reduce their holiday spending this year. In addition, Swanson noted that a lot of customers would choose to shop at supermarkets that had lower costs for their items. Only a select handful, he claims, will spend a lot on their holiday food.
Read Also: Biden and Xi Tackle Issues in a Meeting During the G-20
Thanksgiving travels
Traveling on Thanksgiving is also becoming more difficult for family members who wish to see their far-flung relatives. In the last month, airline prices have increased dramatically. According to recent data, October airfares increased 43% over the same month last year, and despite the rise, many people still decide to purchase holiday travel plans. For instance, even though ticket costs have dramatically increased, three of the biggest airline firms in the US anticipate filled flights during the holiday.
“We are seeing a lot of strength for the holidays or approaching the Thanksgiving period, and our bookings are incredibly strong. However, the bookings are a little bit different this year, and they’re more spread out across multiple days than they were on any single day,” said Andrew Nocella, the chief commercial officer of United Airlines.
“Travelers are resilient. Thanksgiving and Christmas travel to see the family is considered essential by many, and something they won’t compromise on, even when there are higher prices,” said Haley Berg, a lead economist from Hopper, a traveling app.
“Keep in mind that in November and December of last year, we had the delta and omicron waves of COVID. This caused mass cancellations and many travelers to change their plans at the last minute. There’s been a relief on the supply side. Car rental companies [have been] bulking up the number of cars they have available,” she added.
Read Also: Democrats Now Control the Senate After Winning Nevada
Debts after the holidays
Many people use a variety of financial tactics to cover their holiday costs. While some people use their credit cards, others use their money to pay for their expenses. Ted Rossman believes, however, that consumers will accrue unpaid debts following the holidays. And particularly given that the Federal Reserve has raised interest rates at a rate higher than any year in the previous ten years.
“The most important point for consumers is: your [credit card interest] rate is way up. It’s probably going to go up more. So it’s more important than ever to pay down this debt. I think there’s going to be a lot of post-holiday debt hangovers. A lot of sticker shock in January, unfortunately,” added Rossman.
Photo Credit: LoveToKnow
Source: NPR
Opinions expressed by US Insider contributors are their own.
