We’re one week away from Thanksgiving. As Americans shop for the ingredients to make a fanciful meal, they will find that prices are bitingly higher than three or four years ago—even if they may have come down a bit from last year.
From pandemic disruptions to massive, wasteful federal spending in Washington that turbocharged inflation, American households have yet to recover from the toll that high prices and sluggish real wages have taken on their budgets.
American households will swallow these high prices to enjoy the holiday with loved ones. For low-income households, which are disproportionately harmed by inflation, Thanksgiving will be another reminder of how their financial situations have worsened over the past four years.
What happened
The American Farm Bureau calculated that the traditional Thanksgiving dinner, a classic feast for 10, will cost $58.08, 19% higher than five years ago, though down 5% from last year.
As we see, Thanksgiving costs have largely been consistent over decades until starting to rise in 2021 and jumping in 2022 and 2023.
This year, compared to last year, the Farm Bureau pointed to “a mixed bag of savings and squeezes. Seven items dropped in price this year, including turkey, sweet potatoes, frozen peas, a vegetable tray of carrots and celery, pumpkin pie mix, pie crusts and whole milk. However, the remaining four items –dinner rolls, fresh cranberries, whipping cream and cubed stuffing – rose in price.”
But Americans are not just comparing prices from this year to last year. They are considering current bills compared to 2021, when across-the-board prices on goods began to rise quickly.
At IWF, we have our own Thanksgiving Inflation Tracker comparing food prices on common Thanksgiving meal items.
The biggest increase in costs this year compared to 2021 was turkey, the centerpiece of the Thanksgiving feast. Turkey prices are up nearly 27%. Rolls, gravy, some vegetables and other side dishes, nonalcoholic drinks, and desserts are also up by double-digit margins.
In our internal calculations, we found that price increases were lower this year than last year, but not significantly.
What caused Thanksgiving inflation
Inflation does not appear out of thin air. As we have explained, supply chain disruptions during the pandemic did add some costs to doing business, but the biggest culprit was massive, multi-trillion dollar federal spending bills passed during the Biden-Harris administration, notably the partisan leftist-passed American Rescue Plan, and financed by the Federal Reserve wildly printing money. Voices like ours and economists from the right and left, such as Larry Summers, warned the ARPA was too much stimulus for an economy recovering from pandemic shutdowns and that it would fuel inflation. Unfortunately, we were right.
As a result, in 2022, the inflation rate rose to its highest level in 40 years. Although the inflation rate (i.e., the rate at which prices are rising) has come down, the price levels have not returned to their pre-2021 levels. Because wages adjusted for inflation have been negative for months, American households have fallen behind. High interest rates have compounded the hardship of inflation. Credit card bills, utilities, mortgages, and other consumer debt are all rising rapidly.
Americans chose a new way forward on election day 2024. President-elect Donald Trump has promised to bring down prices through deregulation and energy dominance. On top of that, he wants Americans to keep more of their money by cutting taxes.
Let’s hope that one year from now, Thanksgiving costs will have come down markedly. In the meantime, try to enjoy your Thanksgiving season. Time with family, friends, co-workers, and loved ones is priceless.