Thanksgiving and the holiday season are right around the corner. But unlike the past two years, this year many are shedding COVID worries and gathering like they used to.
Not all things are the same. Many people around the country will be contending with another unwanted worry looming over their festivities: inflation. Rising prices are hitting goods central to getting together: food and gas.
Spending more on the basics leaves many without leftovers. How are consumers navigating this during the holidays?
Below in five charts we unpack where and how inflation is hurting Americans and what people are doing to skirt around it this holiday season.
- No cancellations. Unlike the past few years, Americans are banking on showing up for their holiday plans this year. Fewer people are canceling their typical holiday travel plans. It is full steam ahead.
- Fewer savings this year. But this year isn’t a wholesale return to how it was during previous holiday seasons. Inflation has cut into the savings people have on hand. Even compared to before the pandemic, back in 2019, Americans are saving less. Forgoing tomorrow to take advantage of today.
- Prices are higher. Americans are experiencing higher prices but have fewer savings. These problems are particularly acute for some of the most important parts of holiday travel and get-to-togethers: gas for the car and food for the people. Turkeys cost more this year as do groceries. Even as gas prices have come down from earlier this year, they are still far higher than they were last year. Look at the data. The same dollar doesn’t go as far.
- The Thanksgiving pivot. What are people doing? Most are planning on changing how they shop for Thanksgiving for every part of the meal, from meat to desserts to produce. People are buying less, looking for less expensive brands and products, or doing some combination of the two. Thanksgiving yes! But, downsized.
- Spending softens. Families with kids are, in particular, squeezed by prices at the pump and check-out counter. That’s even before people get around to spending on holiday gifts. In its latest report, the New York Federal Reserve registered a 15% spike in credit card balances, the largest jump in 20 years. Some retailers are also reporting that consumers are spending less on the things they don’t need. Looking to be a lean holiday season.
This year, even as many people are getting together again, inflation presents growing challenges around affording big meals and visiting friends and family. Many Americans are employing cost-saving strategies to make the same dollar stretch, but some may also be cutting back on the things they don’t need this holiday season. Maybe the most precious asset this year will be the time we spend with each other