Falling US fuel and food prices bring relief to Thanksgiving shoppers

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Americans are expected to travel in record numbers for Thanksgiving this year, and pay less for their festive dinner, as cheaper fuel and food bring relief to inflation-weary consumers.

Nearly 80mn Americans will travel at least 50 miles this Thanksgiving, an all-time high, according to travel group AAA. The Federal Aviation Administration said the season would be the busiest “in decades”, with more than 308,000 flights scheduled during the holiday week.

The record traffic comes as weaker global oil demand growth and a ceasefire deal in the Middle East drag down crude prices, making petrol cheaper too.

An average gallon of petrol cost just over $3 ahead of Thanksgiving, the lowest level for the holiday since 2020, according to the US Energy Information Administration.

“The cost of filling up your tank is between 5 to 10 per cent lower [than last year] depending on where you are in the country,” said Debnil Chowdhury at S&P Global Commodity Insights.

American Airlines expects 500,000 additional customers this year compared to last, and United Airlines expects its busiest Thanksgiving holiday period ever, with about 30,0000 more people each day than last year.

Meanwhile, the cost of Thanksgiving dinner has fallen for the second year in a row, according to the American Farm Bureau Federation. A dinner for 10 will cost $58.08 this year, down 5 per cent from 2023 — but still almost 20 per cent higher than before the Covid-19 pandemic.

The Thanksgiving price relief is another sign that two years after inflation spiked to multi-decade highs, prices pressures are sustainably easing.

Widespread discontent over the Biden administration’s handling of the economy fuelled Donald Trump’s victory against vice-president Kamala Harris earlier this month.

“The actual inflation of year-over-year increases is less of an issue for people than the sticker shock of the jump in prices that took place as a result of Covid,” said Steve Ricchiuto, chief economist at Mizuho Securities. “You remember the old prices. It hasn’t been that long.”

Betty Resnick, an economist at AFBF, said the Thanksgiving meal would “cost less than it did last year and two years ago, but it is still significantly more expensive than it was five years ago”.

The holiday is among the most cherished family events in the country — and comes three weeks after Americans were bitterly divided by the presidential election.

Some Thanksgiving shoppers said they were still hoping the man the country picked to be president, Donald Trump, would come good on his pledge to reduce prices even further.

“I’m hoping with the orange man that he comes through and shopping is cheaper next year,” said Sandera, 55, a shopper at the Food Bazaar in New York’s Flatbush neighbourhood. She is preparing fewer entrées and sides this Thanksgiving to save money.

Another shopper, Maria, 45, agreed. “We’re having fewer people [over] too . . . It was a conscious thing where money is an issue.”

US retailers are vying to attract Thanksgiving diners on a budget. Walmart has promised customers an “inflation-free” Thanksgiving, with eight-person meals costing less than $7 per person. Target lowered its Thanksgiving meal bundle this year by 20 per cent, offering a $20 meal for a family of four.

“Cost looms large on Thanksgiving this year,” said Justin Cook, US consumer products research leader at Deloitte. “I expect it’ll take at least another year or so before the consumers are starting to feel good.”