Happy Banksgiving: What Thanksgiving Might Cost in 2025

Thanksgiving cheer is sweeping across America! That means family, feast, and financial burden as the cost of food and other essentials continue to rise for Americans already indebted, cash-strapped, and struggling to make ends meet. According to the Fed, inflation is only a mere 2.6%, down from over 3% last year. Setting aside the inherent moral outrage of a small group of academics and bankers inflating away our savings, these official CPI numbers don’t sound too bad.

But if they’re real, why is natural gas 50% more expensive this year? After all, many will be cranking up their gas furnaces to keep those Thanksgiving visitors cozy in their guest rooms and dining areas, and firing up their gas stoves for hours to cook the ceremonial meal. Does this astronomical price increase for a resource essential for warmth, cooking, and life in general not count toward “inflation” according to the Fed?

But wait – maybe our Banksgiving overlords have all converted to electric appliances! But if so, they should know that along with just about everything else we depend on to survive, the price of electricity has also skyrocketed post-2020, when the government and Fed flooded the economy with money to “stimulate” it in the face of a complete COVID meltdown. 

U.S. Electricity Prices, 2014-2024, Bureau of Labor Statistics

Those upward pressures on prices still haven’t abated. In fact, with the Fed cutting interest rates and potential QE on the way, they’ll only get worse. But so far we’ve only explored the price of the gas and electricity to warm houses and cook meals. What about the food itself? Well, wheat is cheaper than it was at the start of the year, so that’s great news for the bread rolls and stuffing. As for the turkey, that’s cheaper too—in Minnesota, for example, the traditional Thanksgiving bird is 40-70 cents cheaper compared to last year, thanks to post-COVID supply chain and bird flu woes being largely solved. 

But there’s another dynamic at play. With so many other Thanksgiving staples, like cranberry sauce, becoming significantly more expensive for Minnesotans, big-box retailers in particular are offering cheaper turkeys to get customers into the store, knowing they’ll be buying other price-inflated holiday essentials at the same time. The story is also different in different parts of the US, with higher Thanksgiving costs in the West compared to Middle America. 

Another reason is increased demand. Popularized alternatives to the traditional bird have caused demand to drop, creating an anomalous price decrease for 2024 that may or may not extend into 2025.

However, there’s another other very major problem: Even with some prices “down” compared to last year, that isn’t a particularly helpful metric for determining broader Thanksgiving cost trends. You have to zoom out more than just a year, and compared to five years ago, Turkey Day is almost 20% more expensive. Even if prices on the turkeys themselves go down a bit in 2025, you can count on central bank monetary policy making Thanksgiving less affordable as time goes on.

This chart is frightening.

In 1975, inflation peaked near 12% and fell in 1976 toward 4%.

When charted with the path of inflation from 2020 until now, it looks almost identical.

You can see the recent uptick in inflation below.

Are we setting up for a 1980 style rebound? pic.twitter.com/65vZqiVYIO

— The Kobeissi Letter (@KobeissiLetter) November 16, 2024

Many Americans, rather than cooking at their own homes, will be traveling to celebrate with relatives or friends. The cost of getting there is up over 8% this year, even with some lower gas prices compared to last year. Car insurance went up over 17% in 2023. These are “Thanksgiving costs” as well, but they’re easy to ignore when all the focus is on the feast itself.

Which isn’t to say that food isn’t getting more expensive overall. Want a coffee with dessert? The world’s favorite caffeinated brew is up by over a whopping 69% year-to-date. Plan on cooking with butter? You’ll pay 39% more. Better use alternatives like canola oil instead, since canola is 11.5% cheaper compared to back in January. And thank goodness turkeys and potatoes are cheaper this year, because beef is up 32%. 

Even the Fed itself is starting to see that inflation isn’t as under control as their rate cut plans might indicate.

Thanksgiving food, transportation, and other aspects of the holidays will most likely cost more overall in 2025 than they do in 2024. But even if they don’t, once you zoom out, the medium and long-term trend of the decaying purchasing power of the dollar isn’t going to stop. It’s a banker’s holiday — but those who are protecting their purchasing power with gold and silver still have plenty to be thankful for.