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Inflation: An Uninvited Thanksgiving Dinner Guest

Macro Minute
November 22, 2022
turkey dinner

Heading into the Thanksgiving holiday, we look forward to reflecting on the things we're most grateful for: stuffing ourselves with food and spending time with loved ones. But it wouldn't be Thanksgiving without some uncomfortable conversations at the dinner table. This year, inflation will probably feature in some of them. To prepare you for this onslaught, this post will take stock of how inflation has gobbled up part of the holiday budget.

Let's start with the cost of traveling home. If you're renting a car, the good news is that rental prices are down 3.5 percent from last year (based on the CPI index for car and truck rentals), though they're still up nearly 50 percent from pre-pandemic levels. For drivers, the price of gas is up 18 percent year over year, and traveling by plane will on average cost 42.9 percent more from last year.

Moving on to food, basic staples are more expensive year over year. To make those mashed potatoes, home cooks will have to pay 15 percent more for potatoes and milk and 27 percent more for butter versus last year. If assembling a green bean casserole, home cooks will shell out 17 percent more for frozen green beans and cream of mushroom soup and 10 percent more for other condiments. Turkey prices are up 17 percent from last year and up by nearly a third versus pre-pandemic 2019 prices.

Expect to pay higher prices to satisfy your sweet tooth this Thanksgiving as well. A store-bought pumpkin pie could be about 19 percent more expensive year over year. If you're making it at home, expect to pay 25 percent more for flour, 43 percent more for eggs, 14 percent more for sugar and 18 percent more for canned pumpkin versus the same month last year.

Table 1: Thanksgiving Price Increases Versus Last Year, 2020 and 2019

Item

Price Change Versus 2021

Price Change Versus 2020Price Change Versus 2019

Travel

    Car and truck rental

    Gasoline

    Airfares


-3.5%

17.5%

42.9%


33.9%

75.7%

36.6%


46.3%

43.8%

8.9%

Mashed potatoes

    Potatoes

    Milk

    Butter


15.2%

14.5%

26.7%


17.1%

19.5%

27.8%


17.5%

24.6%

29.0%

Green bean casserole

    Frozen vegetables

    Soups

    Other condiments


16.7%

17.0%

9.9%


16.4%

20.7%

12.8%


22.1%

28.3%

15.7%

Turkey16.9%18.9%32.3%
Pumpkin pie (store-bought)18.6%23.4%26.6%

Pumpkin pie (homemade)

    Flour

    Sugar

    Eggs

    Canned pumpkin


24.6%

14.1%

43.0%

18.0%


30.8%

20.0%

59.6%

25.8%


33.8%

28.4%

65.6%

29.3%

Source: Bureau of Labor Statistics via Haver Analytics

Despite the burden of higher prices, it's impossible to put a price tag on spending time with loved ones. And inflation may be turning a corner: One thing we can all be thankful for is that the latest CPI report contained positive signs of inflation starting to slow. Of course, we Macro Minute blog writers are always thankful for you, our dear readers.

Happy Thanksgiving!


Views expressed in this article are those of the author and not necessarily those of the Federal Reserve Bank of Richmond or the Federal Reserve System.

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