Giving thanks in hard times: Americans navigate shaky economy as holidays approach
As American families begin to plan Thanksgiving celebrations and holiday shopping, many supermarkets are exploring ways to attract cost-conscious customers into their stores. However, as a government shutdown continues and additional tariffs loom, new surveys show many families are worried that they may not have enough money to fill their tables.
A recent Axios poll found that a majority of Americans say grocery costs are higher now than a year ago. Only about one in five people said it was easier to afford food.
Grocery stores are offering new deals to help counter financial fears. One recent addition is the Thanksgiving meal package, a relatively low-cost collection of holiday staples.
Both Walmart and Aldi are selling meal packages that cost about $4 per person. Both include a turkey and all the sides an average American family would expect.
Grocery chains are hoping these new package deals will allow families to spend for the season while navigating inflation, tariffs and the economic effects of a government shutdown.
What could impact holiday spending?
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On average, those who host Thanksgiving dinner spend about $431 on dinner, drinks and decor.
While the government shutdown is making headlines across the country, it typically doesn’t impact consumer spending, according to the forecasting firm Oxford Economics. However, the shutdown does impact services like the Supplemental Nutrition Assistance Program, also known as SNAP and food stamps. The program provides about 42 million Americans with money to buy food each month.
Officials in several states have said they may not be able to give out food stamps in November because of the shutdown. This could ruin some people’s Thanksgiving plans.
Many food banks offer free meals for Thanksgiving, but their supplies may be limited if millions more people seek help.
Thomas Gremillion, director of food policy at the Consumer Federation of America, said if the shutdown continues, funds for federal food assistance programs will run dry. He said that could exacerbate an already overwhelmed program.
“As a result, they will have to rely on other safety nets, such as food banks, or simply cut back,” Gremillion told Straight Arrow News. “This will reverberate throughout the economy, stressing food retailers and potentially further exacerbating rising food prices.”
What should consumers expect?
According to a LendingTree report, families spend an average of $431 hosting Thanksgiving meals. Americans can expect to pay about 3% more this year, or about $13.
A recent Deloitte survey found that most consumers expect higher prices and plan to spend less this holiday season. However, a report by Oxford Economics predicts that overall holiday spending will be the highest in four years.
Why the conflicting reports? Oxford Economics says high-income earners are projected to account for the majority of spending. The firm also said stock market fluctuations “significantly influenced” discretionary spending.
Adam Rust, the director of financial services at the Consumer Federation of America, told SAN that those stock market gains typically impact Americans who have enough money to invest in it.
“Increasingly, our economy does not work for everyone,” he told SAN. “This year, many working families will struggle to overcome rising costs for essential items and will not benefit from surging stock market prices.”
The Oxford Economics report also stated that nearly all wealth gains were from households making more than $150,000 after taxes, or the top 20% of families. This explains why most Americans may spend less while the economy sees more spending overall.
“For those who already have wealth, it will be a year to remember,” Rust told SAN. “Low- and moderate-income households are like everyone else — they want to be generous with their families, but this year that could be much harder.”
What can families do to make sure they have a good holiday?
According to the Oxford Economics study, shoppers no longer want to wait for big deal days like Black Friday, the day after Thanksgiving. Instead, since the pandemic, more people search for earlier deals in October.
Finance experts say families should set limits when shopping for Thanksgiving food or holiday gifts — and abide by them.
Not having enough money to spend on the holidays doesn’t mean some families won’t pay. Many credit companies offer better interest deals that may seem enticing to many. However, Rust said families should not take on more debt than they can afford.
“Banks offer those seemingly generous terms because they know many people will be unable to pay off the debt before the end of the promotional period,” he told SAN. “Be cautious about using promotional credit offers to overcome a tight budget during the holidays — it’s not a long-term solution.”
As the season for bargain hunting peaks, so does the activity of scammers, who intensify their efforts to find potential victims. Rust said people need to pay attention to deals that may seem too good to be true, because often they are.
“Scammers thrive on social media and online marketplaces, particularly during the holiday season,” he told SAN. “Be skeptical before sending money — once you authorize a payment through an app, you may have no recourse if it turns out to be a scam.”
The most important thing someone can do, according to the Consumer Federation of America, is to create a savings account. They said saving anything is better than nothing, especially as America heads into the holiday season during an uncertain economy.
“Should the administration negotiate an end to the shutdown soon,” Gremillion said, “we will indeed have something to be thankful for this November.”
The post Giving thanks in hard times: Americans navigate shaky economy as holidays approach appeared first on Straight Arrow News.
Ella Rae Greene, Editor In Chief
