Many American households suffer from inflation, particularly at this time of year when each home gears up for an expensive Thanksgiving.
Most families observe a historical remembrance in the US through Thanksgiving. Many American homes host the event and prepare delicacies, most prominently turkey. However, compared to a year ago, wholesale turkey prices increased by 23%. Therefore, the cost of a turkey consumes a sizable portion of the holiday spending plan. In addition, the cost of potatoes and cranberries rose as well.
Several variables cause price increases on a variety of market commodities. This involves rising energy prices, declining employment, and climate change. All of these elements have an impact on both the overall health of animals and the agricultural yield. For example, the Labor Department reports a 12.4% spike in grocery costs over the previous year.
The current rate of inflation in the US is 7.7%. Given the rate of price rises, Michael Swanson, a principal economist at Wells Fargo, predicts that families will reduce their spending this Thanksgiving. Swanson continued that many customers would like to discover supermarkets that give lower rates on items. He argues that only a select handful will splurge on their Christmas dinner.
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Travels over Thanksgiving
The process isn’t becoming any simpler for family members who want to fly on Thanksgiving to visit their far-flung relatives. The cost of flying has increased significantly recently. Records show that airfares increased 43% in October over the previous year. Despite the rise, many people nevertheless decide to get tickets for the holidays. For instance, despite sharply rising ticket rates, three of the biggest US airline firms 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, 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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To cover their holiday expenditures, many people rely on various financial solutions. For example, some people use their savings, while others use credit cards to pay for their expenses. Ted Rossman, however, believes that after the holidays, people will accumulate unpaid debt, 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.