November 15, 2021

Bidenomics Hits the Holidays


KEY TAKEAWAYS

  • Soaring inflation and supply chain woes have Americans worrying about the holiday season.
  • Increases in the cost of food production have raised prices for consumers, leading to predictions that Americans are in for record prices as they prepare their Thanksgiving meals.
  • Retailers are contending with supply chain bottlenecks, which will mean long waits, shortages, and higher bills for shoppers. 

Americans are worrying about the upcoming holiday season. Soaring inflation and supply chain woes threaten to upend families’ plans to gather and give. Inflation is rising at a pace not seen in decades. The Consumer Price Index increased 6.2% over the last year, reaching a high not seen since 1990. The personal consumption expenditures price index also rose to a 30-year high in September, driven by a 24.9% increase in energy prices and a 4.1% increase in food prices. Families are bearing the burden of rising prices at the gas pump, the grocery store, and on their Thanksgiving tables.

Thanksgiving Dinner Breaks the Bank

Thanksgiving Dinner Breaks the Bank

Thanksgiving Dinner breaks the bank

Efficiency gains in U.S. agriculture have allowed Americans to spend less of their income on food over time. But the economic pressures of the Biden era – labor shortages and higher costs for raw materials and transportation – have raised costs along the food supply chain. These cost increases will be paid by consumers, leading analysts to predict that Americans are in for record prices as they prepare their Thanksgiving meals.

The price for the large turkey at the center of the table will be 18% more than last year. Traditional side dishes like potatoes could cost cooks 17% more, and green beans 39% more. Onions to add to family-favorite casseroles could be 51% more expensive. Hosts will spend an extra 2% to have bread on the table and as much as 29% more for the butter to go with it. And a glass of milk to go with their pumpkin pie will cost 8% more than last year.

Shoppers will also have to contend with grocery shortages resulting from supply chain chaos, with supplies of turkeys, cranberry sauce, and pies already low on store shelves.

Black Friday Bust

After breaking the budget to cover Thanksgiving, Americans will have to deal with additional supply chain stress as they navigate the holiday shopping season, hurting both retailers and customers.

Black Friday Bust

Black Friday Bust

Stores trying to stock inventory for holiday shoppers must contend with supply chain bottlenecks. Since last year, wait times for ocean freight are 45% longer, and shipping rates from China have been 350% higher. Once goods are available to move domestically, a shortage of 80,000 truck drivers further slows delivery times. Like the government-mandated lockdowns of last year, these economic challenges impose a disproportionate burden on small retailers who do not have the purchasing power to break through the logjam.

According to Adobe, consumers are experiencing a 325% increase in the number of online out-of-stock messages compared with October 2019. In October alone, there were more than 2 billion instances of a product being out of stock.

When shoppers do find items on their lists, they can expect sticker shock. Prices for artificial Christmas trees may be up as much as 25%. The average price of a television is expected to be up 37% over last year. And the year’s hottest toys will cost 5% to 10% more. Cash-strapped shoppers will also find fewer holiday deals as businesses try to offset the hit of supply chain delays and inflation on their balance sheets.

At the same time, rising inflation is outpacing wage gains for families, exacerbating their holiday stress.

compounding the problem

In March, Democrats ignored warnings that their $2 trillion “COVID relief” law could trigger an inflation crisis. Now, even the chairman of President Obama’s Council of Economic Advisers has admitted: “The original sin was an oversized American Rescue Plan. It contributed to both higher output but also higher prices.” And Americans are suffering the consequences.

Meanwhile, Biden administration officials can barely bring themselves to concede that Americans’ economic worries are rooted in reality, and congressional Democrats are more focused on internal squabbles about their big-spending policy agenda. President Biden casually dismissed public angst, saying earlier this month: “This Thanksgiving we’re all in a very different circumstance, things are a hell of a lot better.”

Democrats think they can ignore Americans’ daily reality this holiday season while they jam through their reckless tax and spend spree, despite warnings that it will almost certainly kick the Biden inflation spiral into overdrive. Americans aren’t likely to forget who stole Christmas.