Unpacking Inflation's Impact on Memorial Day Weekend | Episode 135 | 05-20-24

Could your Memorial Day weekend BBQ cost more than you bargained for? As we gear up to honor our military heroes this summer,  dissect the not-so-sweet reality of inflation's bite on our holiday traditions. In this week’s episode, "Markets with Megan," we take a deep dive into the latest Consumer Price Index report. I'll walk you through the staggering figures showing how essentials like gas, car maintenance, and your favorite grill items have seen a price surge since last year. And if you're considering a road trip or flying to your destination, you'll want to hear about the upticks in maintenance costs and airfare too.

Amidst the aroma of charcoal and the echo of patriotic tunes, this episode doesn’t just serve up the current economic trends; it also brings to the table a discussion on the Federal Reserve's ongoing struggle to manage these shifts. Understand how these cost hikes may be affecting consumer sentiment and spending habits, despite the slight moderation in inflation rates. Plus, I'll provide a glimpse into what the upcoming economic data might spell for your future holiday plans and financial strategies. So before you stock up for your Memorial Day feast, tune in for some crucial insights that could help you navigate this season's celebrations with your budget intact.

Well, enjoying the different festivities around the Memorial Day weekend may be a little bit more expensive this year, but not as bad as in past years. This is Markets with Megan, and this is our regular segment. It's Monday, may the 20th, and we're coming to you with a theme that we wrote about this week, and you know, the Memorial Day weekend is coming up this weekend. We want to take the time to honor those who have honored our country, the fallen in the military, and often we know that we tend to travel around this holiday. It's the kickoff to the summer, as well as lots of barbecues that are going on. So, given that we got the CPI report last week, we wanted to kind of look within some of the details there and give you an idea of the costs, of what's going to cost more this year compared to last year. Well, according to AAA, about 40 million people will travel by car. Gas prices are a little bit higher. They're about five cents higher per gallon this year than they were last year. The more expensive part of if you're traveling is if you plan on having to do any maintenance to your car, because maintenance costs are up 10% on a year-over-year basis. And then, from an airline perspective, domestic airfare is up about 2%. So again, we've had some really big annual increases in things like airfare rental cars, so 2% doesn't sound too too bad. The average round trip cost is about $778. Let's look at food prices for those that will be cooking out around the Memorial Day weekend. First of all, beef prices are up 7% on a year-over-year basis. Fruit and vegetables are up about 2%, so you might want to swap out those hamburgers and fruit salad for maybe something in the fish or seafood area, because those prices have actually been declining on an annual basis for the past eight months. When we look at alcoholic beverages, can't ignore that when you have a barbecue, but alcoholic beverages are up about 2% more than they were last year. Beer and other malt beverages, though they just saw their biggest monthly gain since December of 2022. And they're up about 3% on a year over year basis. But for those that like wine wine actually prices are only up less than a percent over the past year.

Now why do we bring some of this up? Oftentimes when it comes around holidays, you know we want to take the seriousness. Thank the veterans who have served this country, as well as those that have fallen, but at the same time we want to look at things just from a cost perspective. How's it changed? We focus a lot on inflation here and we wanted to give that kind of update and spin on this Memorial Day weekend. Now the one thing is we are seeing inflation moderating and we got that report last week so it is trending in the right direction, but it's trending slower.

We're seeing some things are still being sticky and problematic for the Federal Reserve. And the one thing is, you know there's a lot of celebration around the fact that the inflation numbers are trending lower, but keep in mind that we're coming off of some very significant increases. So when you look at, for example, food, that's only up 2% on a year-over-year basis. That sounds good for the Fed, but a year ago it was up 7% on a year-over-year basis. So we're compounding on top of those big increases that we absorbed after the pandemic. And since the pandemic, food prices are actually up 30% still. So it may be good news for the Fed, but consumers are feeling this and we're starting to see this in some of the retail sales data that we've gotten, and we're definitely seeing this in confidence data that we get out of consumers. So maybe good for the Fed, but consumers still feel this, even though 2% is not that high of a number. It's on top of all of these other big increases that we've seen over the past couple of years.

That's all that we have for today. We'll be back with lots more economic data this week. We get a lot of information on housing, and then we'll also get the Fed meeting minutes that always we tend to look through and get more information, just those initial statements and press conference that Jerome Powell puts out. Thank you, if you have any questions or comments, please. More information, just those initial statements and press conference that Jerome Powell puts out. Thank you. If you have any questions or comments, please feel free to reach out to podcasts@verdence. com. Thank you.