A series of economic struggles that have grown increasingly worse this year will likely have a significant impact on the holiday season, many economic experts predict.
After President Joe Biden gave remarks from the White House this week, one reporter called out, “Will Christmas presents arrive on time, sir?” The president did not respond to that question or the flurry of others as he walked away from the podium.
That question, though, has become a focal point for many as we head into the holiday season.
“Inflation skyrocketing. Gas prices up. Halloween candy stuck in port,” U.S. Rep. Jim Jordan, R-Ohio, said. “Thanksgiving turkeys more expensive. Christmas presents late. Get ready for a rough holiday season in Joe Biden’s America.”
White House Press Secretary Jen Psaki received a similar question during a briefing this week when one reporter asked if the administration could guarantee that holiday packages would arrive on time.
“We are not the Postal Service or UPS or FedEx; we cannot guarantee,” Psaki said. “What we can do is use every lever at the federal government disposal to reduce delays, to ensure that we are addressing bottlenecks in the system, including ports and the need for them to be open longer hours so that goods can arrive. And we can continue to press not only workers and unions, but also companies to take as many steps as they can to reduce these delays.”
A series of supply chain issues driven largely by COVID-related issues have left many shelves empty around the country, and it’s unclear when those problems will be resolved. With the heightened demand around the holiday season, that could leave Americans in the lurch when they go to get their Thanksgiving turkey, Christmas presents, or any other holiday season necessity.
Meanwhile, COVID-19 remains a threat, with the CDC recently suggesting Americans celebrate a “virtual” Thanksgiving. At the same time, the highest inflation in years means holiday foods and Christmas presents will be more expensive than anytime in recent memory.
The Bureau of Labor Statistics released the Consumer Price Index this week, which showed inflation slightly increased from August to September.
“Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment,” BLS said.
Higher inflation means higher prices on a range of goods and services. Those price increases also have been driven by a surge in gas prices in recent months. Fuel price increases trickle down to all kinds of goods because they make it more expensive to transport those goods to market.
The Bureau of Economic Analysis released data on another inflation marker, personal consumption expenditures (PCE), this month showing inflation is growing the fastest in 30 years.
“The PCE price index for August increased 4.3 percent from one year ago, reflecting increases in both goods and services,” BEA said. “Energy prices increased 24.9 percent and food prices increased 2.8 percent. Excluding food and energy, the PCE price index for August increased 3.6 percent from one year ago.”
That increase in energy prices has shown little sign of receding, meaning Americans may need to budget even more this year for the increased heating costs on top of other expenses.
Psaki said the administration is working on the shortage issue.
“But what we are doing is working to – using every tool at our disposal to ease the impact on the American people, ease the impact on families as we look to the holidays, but certainly beyond that,” she said.
Republicans have lambasted the Biden administration over their response to the shortages.
“Biden was at the beach, Blinken was in the Hamptons, and Psaki was ‘out of the office’ as Americans were trapped in Afghanistan,” senior fellow at the American Conservative Union and former Trump advisor Mercedes Schlapp said. “Buttigieg was MIA during a supply chain crisis.”
The issue may begin to clear up in the weeks to come, but many experts are not that optimistic.
"Americans shouldn’t expect to find everything they wished for under the Christmas tree this year," said Charles Mizrahi, author of Wall Street Profits for Main Street Investors, and host of the Charles Mizrahi Show. "With limited supply and increased demand, Americans should also expect to pay higher prices for almost everything. This holiday season may not be the happiest time of the year."