by Paige Terryberry
Senior Analyst for Fiscal Policy, John Locke Foundation
If you are hosting Thanksgiving this year, you can expect to pay much more for your feast. Nearly all your favorite ingredients will have increased in price since last year.
All prices have been rising, but food price increases in particular are detrimental to working-class families, as food makes up a greater share of such families’ consumption baskets and budgets.
The Consumer Price Index (CPI) rose 0.4% in October for the second consecutive month according to today’s release from the Bureau of Labor Statistics. This increase is greater than July and August’s increases.
On an annual basis, prices have increased 7.7%, down from last month’s calculated annual rise of 8.2%. So-called “core inflation” is still running quite hot, up by 6.3% – the second highest rate in 40 years, behind only last month’s 6.6%.
Gas prices, after three consecutive months of declines, rose again in October by 4 percent, up 17.5% over the year.
Restaurant prices, or the “food away from home” index, rose 0.9% in October, and 8.6% over the year, according to the release.
But families attempting to save money by eating at home are experiencing even higher price increases at the grocery store. Food at home increase 0.4% over the month, and 12.4% over the year. According to the release:
“Four of the six major grocery store food group indexes increased over the month. … The index for meats, poultry, fish, and eggs rose 0.6 percent over the month while the index for cereals and bakery products increased 0.8 percent in October. The index for nonalcoholic beverages rose 0.5 percent in October, after rising 0.6 percent last month.”
Groceries are up more than food away from home. Thanksgiving is right around the corner, and some families may be forced to change up their traditions.
Below are some headlines you might have seen highlighting price inflation for food, especially food at home.
“Inflation is so bad you may be better off dining at a restaurant for Thanksgiving this year”
“Expect to pay a lot more for Thanksgiving this year thanks to food inflation”
“Inflation hits Thanksgiving dinner — here’s how much more it could cost this year: Wells Fargo”
“Turkeys Will Be More Expensive Than Ever This Thanksgiving, and Harder to Get”
“Grocery store prices are up. Is this the year to dine out for Thanksgiving?”
“Pizza for Thanksgiving? It might be a dinner option due to inflation”
Popular grocery chains realize Americans are at a breaking point. Big box grocery stores Walmart and Aldi are making a promise to time travel back to pre-inflation, low prices.
Aldi’s Thanksgiving Price Rewind is a deal “on select ALDI products based on average retail at ALDI from Nov. 2-29, 2019.”
Walmart promises, “This Year’s Thanksgiving Meal at Last Year’s Price” where they will be “removing inflation on an entire basket containing traditional Thanksgiving items.”
“Inflation? No thanks,” reads Walmart’s festive Thanksgiving shopping page.
Walmart and Aldi have an acute sense of what customers will pay for food and are adjusting accordingly in time for the holiday season. This action also shows the efficiency of private businesses and their ability to adapt to customer needs.
Below find a table of estimated price increases for your Thanksgiving favorites:
Inflation is complex, but its source is pretty simple: deficit spending fueled by money printing. Newly created money from the federal reserve has resulted in too many dollars chasing too few goods in our economy.
The Federal Reserve has raised rates six times this year. The last four increases have been 0.75-point hikes. The borrowing rate is now at the highest level since January 2008. A soft landing for our economy will be nearly impossible to avoid.
Inflation is an implicit tax on American families, harming the poor most. This Thanksgiving, Americans would be thankful for honest acknowledgment from our leaders of inflation’s root causes.