Inflation strains many American families, especially during Thanksgiving, as each home prepares for an expensive celebration.
In the United States, Thanksgiving is when many relatives gather to commemorate a historical event. Many houses host the event and prepare various foods, including turkey. However, wholesale turkey prices jumped by 23% year over year. As a result, purchasing a turkey needs a considerable portion of the holiday money. Furthermore, the cost of potatoes and cranberries has risen.
Several factors lead to price increases on a variety of market commodities. This includes rising energy prices, reduced labor availability, and climate change. All of these elements have an impact on agricultural yield and animal health in general. As a result, grocery prices jumped 12.4% over the previous year, according to the Labor Department.
The current rate of inflation in the United States is 7.7%. Given the rate of price rises, Michael Swanson, a principal economist at Wells Fargo, believes that families will cut back on spending this Thanksgiving. Swanson noted that many shoppers would shop at supermarkets that provide lower-priced items. He believes that just a few people will spend a lot of money on holiday food.
Read Also: Biden and Xi Convene to Go Over Key Issues
Airfares during Thanksgiving
Traveling on Thanksgiving is also becoming more difficult for family members who wish to see distant relatives. Airfares have risen sharply in the last month. According to current data, October airfares increased 43% over the previous year. Despite the rise, many people still prefer to buy holiday tickets. For example, three of the top airline firms in the United States anticipate fully booked flights throughout the holiday season, despite considerable increases in ticket costs.
“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, which 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.
Problems with debt after the holidays
Many people use various financial techniques to cover their holiday costs. For example, some people use their money to pay for their expenses, while others use credit cards. But, on the other hand, Ted Rossman believes that many will incur outstanding debts after the holidays, especially given that the Federal Reserve has hiked interest rates quicker than in any previous year.
“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
Opinions expressed by Texas Today contributors are their own.