Inflation burdens many American families, especially this Thanksgiving as each household prepares for costly celebration.
Thanksgiving is when many relatives celebrate a historical commemoration in the US. Many households host the occasion and cook several dishes, most especially turkey. However, prices of wholesale turkey jumped 23% when compared to a year ago. Therefore, buying a turkey requires a significant chunk of the holiday budget. Moreover, potatoes and cranberries also increased in price.
Several issues contribute to price hikes on several goods in the market. This includes soaring energy costs, lessened labor, and climate change. All of these factors affect the harvest of crops and affect the overall health of animals. According to the Labor Department, prices of grocery goods increased 12.4% from last year.
Now, the inflation rate in the United States is at 7.7%. Michael Swanson, a lead economist at Wells Fargo, thinks that families will cut on spending this Thanksgiving, given the rate of price increases. Swanson added that many buyers would opt to find grocers that offer discounted prices of goods. He contends that only a few will spend big for their holiday menu.
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Traveling during Thanksgiving
Traveling on Thanksgiving is also not getting easier for family members who want to travel to see their distant loved ones. Airfares soared in the past month. As per current records, airfares in October hiked 43% higher than last year. However, even with the increase, many still choose to book tickets for the holidays. For instance, three of the largest airline companies in the US expect fully booked flights over the holiday, even when ticket prices significantly soared.
“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.
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Outstanding debt after the holidays
Many people rely on different financial strategies to pay for their holiday expenses. Some people use their savings to cover their expenditures, while others utilize their credit cards. However, Ted Rossman thinks people will incur outstanding debts after the holidays, especially now that the Federal Reserve has increased interest rates at a pace faster than any year in the past decade.
“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
