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Price Increases Will Mean A More Expensive Thanksgiving Dinner

Food Price increases
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EDITOR'S NOTE: One thing people won’t be thankful for this Thanksgiving is how much the turkey and all the fixings will cost, thanks to rampant inflation. Reason.com shares a recent CBS report that shows exactly how much more we’ll be paying for our holiday feast. The reports noted: “Compared to 2020, a 16-pound turkey increased from about $19 to $25 this year. A 30-ounce pumpkin pie mix is up from about $2 to at most $5.49. Milk increased this year to $3.39 compared to $3.08 in 2020. A box of cubed stuffing is almost a dollar more up from $2.81 to $3.79. The only observed decrease in price was for a bag of fresh cranberries, $2.49 instead of $2.69 last year." That is not a good way to start the holiday season and is a very bad sign for the next price increases on their way, Christmas and Hanukah gifts. 

But also be thankful that Americans have been spared the worst of soaring food costs.

As we head into the holidays, part of the season's cheer will be tarnished by the higher prices we'll all pay for holiday festivities. In fact, food, like many goods and services, is costing us more as the flood of dollars unleashed by the federal government diminishes their value, ensuring our money doesn't go as far as it once did. If you're looking for a relative bright spot, count yourself lucky as an American, because things could be worse: Around the world, people generally far less prosperous than those in our own country are paying almost one third more for their meals than they did a year ago. That's a lot more dough for a lot less bread.

With Thanksgiving looming, a relatively easy comparison is made in the price of a turkey dinner with all the trimmings compared to the same feast in 2020.

"Compared to 2020, a 16-pound turkey increased from about $19 to $25 this year," CBS Los Angeles reports. "A 30-ounce pumpkin pie mix is up from about $2 to at most $5.49. Milk increased this year to $3.39 compared to $3.08 in 2020. A box of cubed stuffing is almost a dollar more up from $2.81 to $3.79. The only observed decrease in price was for a bag of fresh cranberries, $2.49 instead of $2.69 last year."

The numbers support the anecdotes. With inflation running at an annual rate of 6.2 percent, according to Bureau of Labor Statistics figures, food prices are up overall by 5.3 percent, with meat, fish, eggs, and poultry (that Thanksgiving turkey being the obvious example) up by a painful 10.5 percent. How about a festive bowl of baked beans, everybody!

Theoretically, higher wages could off-set higher prices if they moved in lockstep across the economy, but they don't. Some members of the media (such as Stephanie Ruhle who is, somehow, NBC News' senior business correspondent) attribute inflation to pressure to pay higher wages to attract workers. "Higher wages are one of the contributing factors to inflation," Ruhle insisted this week.

In fact, though, "real average hourly earnings decreased 1.2 percent, seasonally adjusted, from October 2020 to October 2021," according to the Bureau of Labor Statistics. So, that's not behind the price increases. What's going on?

"The US Federal Reserve and Treasury have printed trillions of new dollars and sent checks to just about every American," comments Hoover Institution economist John Cochrane. "Inflation should not have been terribly hard to foresee; and yet it has caught the Fed completely by surprise."

"I think they're just not recognizing just how much demand is being created by the tremendous wall of money – 15 percent of GDP – in one year that they released last spring," agrees Larry Summers, director of the National Economic Council under President Barack Obama, about the Biden administration's massive spending.

In fact, as early as February, Summers warned "there is a chance that macroeconomic stimulus on a scale closer to World War II levels than normal recession levels will set off inflationary pressures of a kind we have not seen in a generation, with consequences for the value of the dollar and financial stability."

Originally posted on Reason.

 

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