Inflation’s effects on the holiday season

Americans will pay more for their Thanksgiving dinners this week, and inflation likely will be on their minds afterward, as they plan holiday season travel and gift giving.

But things aren’t as dramatic as some are saying.

"Good luck getting a Turkey for Thanksgiving," former President Donald Trump said on Nov. 15 at his Mar-a-Lago club in Florida, when he announced his third run for president. "Number one, you won’t get it. And if you do, you’re going to pay three to four times more than you paid last year."

Trump’s daughter-in-law, Lara Trump, took it further, arguing that higher prices for the holidays are a Democratic plot to divide Americans.

"They don’t want us to have any common ground. They don’t want us to have any shared traditions, like Thanksgiving," she said in a segment on Fox News.

Bleak forecasts such as these have been widely shared on social media.

But the former president is way off base about the current price and availability of turkeys, and increased costs aren’t stopping families from gathering for Thanksgiving, travel forecasts show. 

Here’s a look at how inflation may affect your holiday plans, from food to travel and gift-giving.

The American Farm Bureau Federation released its annual survey of Thanksgiving meal prices Nov. 16, which said consumers will spend $64.05 to feed 10 guests this year. That’s $10.74 more than last year, a 20% increase.

The Farm Bureau said a 16-pound turkey is expected to cost $28.96. That’s $1.81 per pound, a 21% increase from last year’s prices — not the three- or four-fold increase Trump claimed. 

But now, prices are lower than the Farm Bureau’s projection. Its forecast was based on volunteer shoppers checking prices from Oct. 18 to Oct. 31, before many grocery chains began offering holiday discounts on whole frozen turkeys, the Farm Bureau said. 

In retail advertisements for Nov. 18 to Nov. 24, the weighted average price of a frozen hen was $1 per pound, according to the latest report from the U.S. Department of Agriculture. That’s $16 for a 16-pound bird, up 7.5% from a year ago. Prices vary widely by region, the USDA said.

Roger Cryan, chief economist for the American Farm Bureau Federation, attributed higher food costs to inflation; fuel and fertilizer costs; supply chain disruptions and the war in Ukraine. Increased feed costs for farmers and a slightly smaller flock this year have affected turkey prices particularly, the Farm Bureau said. Many regions have seen shortages because of an avian flu outbreak that has reduced the turkey population. 

Food costs have risen more than other items. The Consumer Price Index, a measurement of changes in the retail prices of goods and services, shows inflation overall was up 7.7% year over year in October, but food costs at home are up 12.4%, according to the Bureau of Labor Statistics.

Still, Americans should have no trouble finding turkeys at grocery stores, Cryan said.

"Our system works well. Typically we don’t see shortages, we would just see price adjustments," said Cryan.

Holiday travelers at Logan International Airport, Nov. 21, 2022, in Boston. (AP Photo/Charles Krupa)

Inflation doesn’t seem to be slowing Thanksgiving travel. The Transportation Security Agency said it expects to screen more than 2.5 million passengers the Sunday after Thanksgiving, close to pre-pandemic levels. And the American Automobile Association expects a slight rise in the number of people traveling 50 miles or more from home by car for Thanksgiving. 

Drivers will pay record prices at the pump, according to GasBuddy, a tech company that lets app users find real-time gasoline prices across the country.

The site projects a national average of $3.68 on Thanksgiving Day, 20 cents higher than the Thanksgiving Day record of $3.44 set in 2012, according to a Nov. 16 blog post.

Although prices for regular unleaded gas remain about 25 cents per gallon higher than a year ago — $3.63 this year, compared with $3.40 in 2021 — they’ve been decreasing from a peak of about $5 per gallon in June, according to AAA.

Looking ahead, AAA told PolitiFact there’s no reason to expect a major spike in gas prices before the end of 2022.

The average domestic airplane ticket, meanwhile, will cost about $380 for last-minute Thanksgiving tickets, up about 8% from this time last year, the travel site Hopper reported Nov. 20.

For the week of Christmas, a domestic plane ticket will cost $370, up 7% from last year. 

Other holiday travel costs vary compared with the previous year: 

• Car rental prices in October were 3.5% lower than the year before, according to Consumer Price Index data released in November by the U.S. Bureau of Labor Statistics. Car rentals around the Thanksgiving holiday are around $62 per day, down 22.5% from $80 per day the year before, according to Hopper. Christmastime rentals are expected to cost about $65 per day. 

• Hotel prices are up from last year. The average hotel room for Thanksgiving travelers is $173 per night, a 14% increase from last year. For Christmas, that will increase to $202 per night, also up 14% from a year ago. Costs vary by destination; hotel stays in cities such as New York (up 25%), Chicago (up 17%) and Charlotte, North Carolina, (up 66%) will cost you more, but a stay in Las Vegas is 17% cheaper, according to AAA figures.

Black Friday shoppers in Commerce, Calif., Nov. 26, 2021. Inflation this year will have holiday shoppers looking for savings wherever they can.

Shoppers are factoring in inflation when they make their lists this year, surveys have found. Some are even checking twice to strategize ways to save, such as shopping earlier, hunting for discounts, choosing different brands and buying gifts for fewer people.

Still, the National Retail Federation, the world’s largest retail trade association, is forecasting holiday retail sales growth of 6% to 8% this year, though the numbers are not adjusted for inflation. 

Much of that growth is driven by households making more than $150,000 a year, which will spend $327 more than last year, the federation said. By comparison, households making less than $75,000 will spend $606 on average, down from $655 last year.

Inflation isn’t equally affecting the cost of traditional gifts. According to October Consumer Price Index numbers released in November, consumers are paying more for toys (up 3.1%), apparel (up 4.1%) and jewelry and watches (up 2.5%). But electronics prices have dropped, with smartphone costs down 22.9%, computers down 3.1% and televisions down 16.5% year over year, data shows.

Consumers and businesses should expect to pay more for shipping, including holiday surcharges, on top of already increased costs because of inflation — delivery services were already up 13.9% from a year ago, CPI data shows. 

The U.S. Postal Service in October began a temporary price hike for packages during the peak holiday season, which it said was similar to increases in years past. FedEx and UPS also have again added surcharges for the peak holiday season, mostly affecting large-volume shippers, according to the trade publication Supply Chain Dive.

Meanwhile, for the first time, Amazon has added a holiday surcharge for third-party sellers who use its fulfillment services.

Even your Christmas tree is expected to cost more this year. With increased costs for shipping, fertilizer, trucking and more, U.S. consumers may pay 5% to 20% more than last year for real and artificial trees, American Christmas Tree Association Executive Director Jami Warner told ABC’s "Good Morning America."