Wed, Nov 23, 2022 4:34 PM
By Casey Harper, The Center Square
Americans will pay higher prices for a range of goods and services for the Thanksgiving holiday and Black Friday shopping this year, and it looks like things may only get worse as we draw nearer to Christmas.
Those driving for the holidays and of course those preparing the Thanksgiving meal will pay the price this year. Federal inflation data from the Commerce Department shows energy costs have risen 17.6% in the past year, and overall food costs increased 10.9% in the same time.
“Inflation is really taking the joy out of Christmas shopping this year,” said E.J. Antoni, an economic expert at the Heritage Foundation. "Families are also thinking twice about putting their purchases on credit cards, since interest rates are rising."
Heritage reports that the average family is $7,400 poorer since President Joe Biden took office because of interest rate hikes and inflation.
“Skyrocketing prices mean there’s nothing left at the end of the month to save, and monthly savings have collapsed 85% under Biden,” Antoni said. “Meanwhile, credit card debt is up 24%, real disposable income is down 11.5%, and homeownership affordability is down 33%. The hidden tax of inflation has hit Americans hard, and they have less spending money for Black Friday.”
Polling shows Americans are feeling the pain. A survey from Deloitte found that Americans are planning to spend more shopping this week than last year but are relying more on credit cards.
Americans are also saying they plan to spend more this holiday season than any year since before the pandemic, according to Gallup.
“One reason Americans' holiday spending estimate is especially high this year could be that consumers are expecting to pay more for goods like clothing, electronics and toys after a year of high inflation," Gallup said. "Still, the fact that spending intentions are significantly higher now than a year ago at this time is a promising sign for retailers as the holiday season gets underway.”
Federal inflation data shows Americans will face higher prices on a range of goods and services than in previous years, though it varies. According to U.S. Bureau of Labor Statistics’ seasonally unadjusted figures for urban consumers, from October of 2021 to October of 2022, several holiday shopping favorites have risen in cost.
During that time, prices for apparel increased 4.1%, audio equipment rose 3.4%; pets and pet products rose 12.5%; sports equipment rose 5.7%; photographic equipment and supplies rose 4.1%; toys, games, hobbies and playground equipment rose 6.7%; and musical instruments and accessories rose 4.7%.
Other goods, though, have seen notable decreases in the past year. Television prices, for example, have declined roughly 16% while computers, peripherals, and smart home assistant prices dropped 3.1%. Smartphones dropped 22.9%.
Potential supply chain issues may only make things worse as we get closer to Christmas. Gas prices are expected to rise in the coming weeks as offsets from the Strategic Petroleum Reserve come to an end and OPEC cuts oil production. At the same time, the potential for rail workers to strike could create major supply chain issues and even shortages.
“Despite the high prices, people are probably better off buying now instead of doing any last minute shopping this year because of the very real chance of a nationwide railroad strike which would cripple the economy,” Antoni said. “Virtually everything we buy – including food – is transported on trains. For context, railroad employees were considered essential workers during the shutdowns because everything would virtually grind to a halt without them. It turns out the ‘tentative deal’ Biden brokered was just to avoid a strike before the midterms, much like his secret request that the Saudis not cut oil production until after the elections as well.”
The U.S. Chamber of Commerce raised the alarm about that deal potentially falling apart, calling the unions the "Grinch who stole Christmas."
“In September President Biden, who is a champion of labor, struck a deal with the leadership of the 12 railroad unions and railroads to avert a national rail strike. But now four unions are going back on their word and threatening to be the grinch who stole Christmas by forcing a national rail strike," said Suzanne P. Clark, president and CEO of the U.S. Chamber of Commerce. "Congress must now impose the deal President Biden negotiated, and the railroads and union leadership agreed to. If Congress fails to do so, a rail strike would substantially exacerbate inflation and the economic challenges Americans are facing today."