According to economic specialists evaluating numerous sectors and current pricing patterns, Christmas activities will cost 17% more in 2019 than they did before the epidemic. The cause of this? The dreaded inflation that is impacting nearly every industry and every aspect of our everyday lives.
What Is Inflation?
And what exactly is inflation? Simply put, inflation is the gradual loss of a currency’s buying value over time. The rise in the average price level of a selection of chosen goods and services in an economy over time may be used to calculate a quantitative estimate of the pace at which buying power declines. An increase in the overall level of prices, which is frequently stated as a percentage, signifies that a unit of money now buys less than it did before. Right now, America is facing what could be a very serious period of inflation, following the devastating COVID-19 pandemic.
How Does This Affect Christmas?
According to estimates, gifts, a normal Christmas lunch for ten people, and a tree will cost an average of $1,700, up from about $1,500 only a few years ago in 2019.
Experts have calculated how extreme the price hikes will be across the board. They do this by evaluating the pricing of prominent goods on many holiday wish lists. As well as the prices of components for a holiday feast and other Christmas mainstays. For example, the cost of a gallon of milk has increased by more than 27% since last year.
Christmas trees are considerably more costly, especially if you buy a new artificial one. The typical fake tree is 26% more expensive than last year. The average natural tree is around 5% more expensive.
It’s vital to remember that the news isn’t always negative! Not everything on your Christmas wish lists has been affected by inflation. Numerous popular gift items have remained unchanged in price since last year, including smartphones, footwear, and a Nintendo Switch or Sony PlayStation.
Despite the fact that inflation is skyrocketing—at its highest rate in over 30 years, according to government officials—shopping seems to be unaffected so far. Many big stores have already claimed record sales, both online and in person.
Conclusion
According to the National Retail Federation, this year’s Christmas retail sales will be the largest on record.
The consumer price index, a key indicator of inflation, has grown 5.4 percent in the last year, the highest level in more than a decade. While President Biden and Federal Reserve Chairman Jerome Powell have stated that the price rises are only temporary, indicating pent-up demand as a result of the epidemic, many economists anticipate the scenario will endure far beyond 2023 and 2024.
An overabundance of money is the primary cause of the current inflation in the United States. The money supply in the United States increased by $5.5 trillion between December 2019 and August 2021, an astounding 35.7 percent growth in just a year and a half, owing mostly to the Federal Reserve’s purchases of Treasurys and mortgage-backed securities. Of course, this has benefited the economy at a time when it was most needed. However, it has also resulted in the present Christmas price issue.