- Advertisement -spot_img
Friday, December 3, 2021

Inflation is forcing many buyers to abandon Christmas holidays

Many Americans plan not to get into the holiday mood this year, according to a new study by consulting firm Deloitte (pdf).

According to an annual survey, 11.5% of Americans will spend nothing on gifts, gift cards, or any other entertainment item. This is the highest percentage since the company began tracking consumers’ holiday habits.

What motivates many Americans to become Scrooge? Today, the main problem for consumers, investors and voters: inflation.

The study found that thirty-nine percent of consumers who can spend more this year attributed this to higher prices overall. Half of consumers who say they will spend less this year blame higher food prices.

The poll also highlighted the “fairy tale of two holidays” with a significant gap in purchasing plans between high and low income groups. A holiday retail report found that American households with annual incomes of $ 100,000 or more would spend $ 2,624 this Christmas, up 15 percent. Households earning less than $ 50,000 a year will spend $ 536, 22 percent less than in 2020.

“This story of two holidays is a good reflection of the story of two pandemics, right? What starts out as a health crisis turns into a financial crisis if you live in a low-income population. [bracket]said Stephen Rogers, executive director of Deloitte’s Consumer Industries Division. “Those of us with a 401k investment have done well. You can see that from 2019 to 2021, the lower-income group spends nearly half of what they used to spend. And the higher-income group is almost double what they spent two years ago. ”

Epoch Times Photos
Marko Novcic, 23, helps a couple pick a Christmas tree at the North Pole of Xmass Trees in Nashua, New Hampshire on November 21, 2021 (Joseph Prezioso / AFP via Getty Images)

Everything has to get more expensive as Santa Claus walks down the chimney, from food to trees to energy. These conditions could create a not-so-happy little Christmas for many families as the Salvation Army prepares for a surge in demand comparable to the Great Recession more than a decade ago.

“Anything that puts strong pressure on family budgets across the board in the short term will lead to more stress and harm for low-income households because they simply have fewer opportunities to do so,” said Josh Bevens, research director at the Economic politicians in an interview with Bloomberg.

Christmas this year will be more expensive

The United States Department of Agriculture (USDA) said in a recent report (pdf) that the price of live Christmas trees has nearly doubled since 2015. For example, the average Tannenbaum will sell for 30 percent more.

Stocks of artificial and living trees are decreasing. The situation has metastasized so much that Ikea has confirmed it will not be selling Christmas trees in Canada this year.

As everyone finishes their Thanksgiving holiday, many families prepare for their next Christmas dinner with a turkey centerpiece. The Federation of American Farmers Bureau (AFBF) estimates that the value of a 16-pound turkey is up 24% this year to an average price of $ 23.99. All the usual side dishes will also be more expensive, from russet potatoes to buns.

Do you want to give your loved one five gold rings or watch eleven pipers play at a concert? According to the PNC’s annual Christmas Price Index, the true value of Christmas in the traditional 12 Days of Christmas tune is up 5.4% over 2019.

“Comparing the data for 2019 allows us to better assess the impact of inflation before the pandemic swept the global economy. We’re trying to normalize the comparison, excluding the once-in-a-century pandemic that had a huge impact on last year’s data, ”said Amanda Agati, chief investment officer of PNC Asset Management Group, in a statement.

Read Also:  SpaceX will debut new Dragon capsule for upcoming crew launch

But this is the norm for the entire market, as many experts predict this will be the most expensive Christmas in the last 30 years. The price hikes were fueled by the deepening global supply chain crisis and the simultaneous strong international demand, which was not keeping up with production and inventory levels.

Agati recommends keeping a close eye on retail sales, personal savings and consumer sentiment as critical indicators of a successful or unsuccessful holiday season.

Will purchase prices increase?

The National Retail Federation (NRF), the industry’s largest trade organization, predicts sales will grow as much as 10.5 percent from last year to a record $ 859 billion.

Epoch Times Photos
Epoch Times Photos
People go shopping at Roosevelt Field in Garden City, NY, December 7, 2018 (Shannon Stapleton / Reuters)

Some economists consider these rosy predictions to be justified. Wages are rising, although skyrocketing prices and higher living costs are taking their toll on these income gains. In addition, many Americans, who were not embarrassed by the CCP (Chinese Communist Party) virus pandemic, accumulated savings last year, giving them the opportunity to spend during the holidays.

“As the delta wave subsides, consumer spending is on the rise, and the latest data shows an increase in hotel occupancy and restaurant visits,” said BMO senior economist Sal Gutieri in a research note. “Holiday sales will be very strong this year … if stores find enough workers to deliver them.”

However, as delivery delays affect companies trying to meet increased demand, prices will rise in response to imbalances in supply and demand.

Financial experts argue that these companies are confident that buyers will be able to absorb these higher prices because they are willing to pay more.

“Consumers pay higher prices because there is limited opportunity to purchase other goods,” Gus Faucher, chief economist at PNC, told CNN Business. “If your dishwasher breaks down and you need a new one and there are not enough dishwashers, you are willing to pay more. It’s the same with household products such as cleaning products, toothpaste, or toys. This allows businesses to raise prices. ”

Analysts point out that if price inflation remains consistently high for a long time, consumers and even retailers will look for alternatives.

“If inflation remains high, and this is stronger than the rise in wages, it will force consumers to be more careful about their spending,” added Foscher. “They need to eat less outside the home and go to the movies less. Instead of buying steaks, they are going to buy ground beef. “

Recent data suggests that consumers may be disappointed with market conditions and the skyrocketing consumer price index (CPI). The University of Michigan’s final consumer sentiment index fell to 67.4, while inflation expectations rose to 4.9 percent.

From Goldman Sachs to former Treasury Secretary Larry Summers, everyone agrees that inflation will get worse before it gets better. Whether this will make the holiday mood worse or not will be shown in the monthly retail sales data of the US Census Bureau.

Andrew Moran

To follow

Andrew Moran is involved in business, economics and finance. For over a decade, he has been a Toronto-based writer and reporter, contributing articles for Liberty Nation, Digital Journal and Career Addict. He is also the author of The War on Cash.

World Nation News Deskhttps://www.worldnationnews.com
World Nation News is a digital news portal website. Which provides important and latest breaking news updates to our audience in an effective and efficient ways, like world’s top stories, entertainment, sports, technology and much more news.
Latest news
Related news
- Advertisement -

Leave a Reply