šŸŽ™ļø Thanksgiving Economics

[4 minutes to read] Plus: From travel to turkeys and pumpkin pie

Weekend edition

šŸ¦ƒ Whoā€™s running a turkey trot this week? Volunteering or handing out meals to those less fortunate? Spending time with loved ones? Let us know by replying to this email.

This Thanksgiving, our entire team thanks you for following the financial markets with us every day of the week.

Today, we'll discuss the economics of Americaā€™s big day, Thanksgiving.

All this, and more, in just 4 minutes to read.

ā€” Matthew

QUOTE OF THE DAY

"Gratitude unlocks the fullness of life. It turns what we have into enough, and more. It can turn a meal into a feast, a house into a home, a stranger into a friend.ā€

ā€” Melody Beattie

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WHAT ELSE WEā€™RE INTO

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šŸŽ§ LISTEN: The power of simplicity: William Green + Anthony Kingsley

šŸ“– READ: On finding your lifeā€™s work and meaning

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THE ECONOMICS OF THANKSGIVING

Americaā€™s big day

Thanksgiving is defined by family gatherings, football, and gratitude, but itā€™s also a way to study consumer spending power. 

From Black Friday to increased travel on the road and in the air to the busy grocery stores, Thanksgivingā€™s traditions trickle throughout the economy. 

The celebration is hundreds of years old, dating to the days of the Pilgrims. But its official roots trace to the Civil War when Abraham Lincoln felt Thanksgiving might unite the divided country. He declared it a national holiday in 1863.

Today, food, entertainment, and travel businesses see it as a boon for their bottom line.

From The Wall Street Journal

The travel

Thanksgiving is the busiest travel week of the year, and more than 55 million people are expected to travel in the U.S. alone. 

Airlines are bracing for the most flights ever this holiday season, as cheaper airfare than last year is providing relief to consumers. The Sunday after Thanksgiving is expected to be the busiest day. About 30 million passengers will fly the week before and after the holiday, a 12% jump over last year. 

ā€œFlying on Thanksgiving Day is 11% cheaper than average for the week of Thanksgiving, but hereā€™s the real kicker ā€” itā€™s almost half as busy as the day before Thanksgiving,ā€ a travel analyst noted. 

For years, analysts have warned of delays and heavy traffic around Thanksgiving. Their solution? Avoid traffic. Leave early if you must. 

ā€œFor those who listen to Ben Franklin,ā€ a AAA analyst quipped, ā€œFish and company go bad after three days.ā€

From The Wall Street Journal

The food

Thanksgiving dinner prices have fallen after years of rising prices and a record high in 2022. 

The average turkey meal will cost about 4% less than last yearā€™s record. According to the American Farm Bureau, the average cost for a Thanksgiving meal for 10 was about $61, down from $64 in 2022 but still 25% higher than in 2019. 

"While shoppers will see a slight improvement in the cost of a Thanksgiving dinner, high inflation continues to hammer families across the country, including the nation's farmers," one analyst noted this week. 

  • Half pint of whipping cream: $1.73 (down 22.8%)

  • 12-ounce bag of fresh cranberries: $2.10 (down 18.3%)

  • Two frozen pie crusts: $3.50 (down 4.9%)

  • 14 ounces of cubed stuffing mix: $3.77 (down 2.8%)

After Russia invaded Ukraine, commodity prices for wheat, corn, and cooking oils went skyward, but theyā€™ve since fallen. Avian influenza infections crushed U.S. poultry flocks last year, but theyā€™ve also slowed this year, alleviating egg and turkey prices.

From The Wall Street Journal

The shopping

The Tuesday after Thanksgiving is GivingTuesday, a movement created in 2012 to encourage philanthropy and giving back, whether itā€™s a large corporation writing big checks or a mother and daughter volunteering an hour at the local soup kitchen. 

In 2005, Cyber Monday ā€” the Monday after Thanksgiving ā€” was created to drive e-commerce sales. Itā€™s more of an extension of Black Friday, whose sales are usually considered a sign of the country's economic health. 

Black Friday has become almost a holiday in its own right and the start of a critical season for retailers. Economists say ā€œblackā€ refers to profitability, as old bookkeepers record profits in black ink and losses in red. The idea? Retailers sell enough around Black Friday to be ā€œin the black,ā€ or profitable, for the year. 

The day of spending and discounts dates to the 1950s in Philadelphia, where shoppers flooded the street the day after Thanksgiving looking for major sales. That coincided with a rise in suburbanization and consumerism in America, further driving post-Thanksgiving sales. 

By the 1990s, Black Friday started appearing in newspapers and on TV, and fighting with others over parking spaces became a tradition. By the 2000s, Black Friday replaced the Saturday before Christmas as the biggest shopping day on the calendar. As the actress Bo Derek has joked, ā€œWhoever said that money canā€™t buy happiness simply didnā€™t know where to go shopping.ā€

About 200 million Americans shopped during the Black Friday weekend in 2022, which is likely the highest figure of all time, per the National Retail Federation. Consumers spent about $325 each, also an all-time high. 

As inflation continues to cool off, will this year set another record?

Dive deeper

For more, check out the History Channelā€™s video on Thanksgivingā€™s roots.

See you next time!

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