Reality bites at the Thanksgiving table

By Carmel Crimmins, Reuters Econ World podcast host

Happy Thanksgiving,

I hope as many of you as possible are getting stuck into the turkey and cranberries today. The traditional Thanksgiving feast should be cheaper this year thanks to some steep discounting in the grocery store but that will be cold comfort to many Americans. The overall cost is still 13% higher than 2019, before the COVID-19 pandemic, and side dishes like sweet potatoes are pricier than last year.

It's bound to be a talking point around many dinner tables. Americans are clearly fed up with higher prices. Inflation is down, running around 3% annually versus more than 9% at its peak under President Joe Biden. But goods - those subject to President Donald Trump's tariffs in particular - cost more than before, and wage gains for many have been largely offset by higher living costs.

You can see the dissatisfaction in Trump's approval ratings and consumer sentiment. But will it translate at the online checkout on Black Friday? Inflation is eating into income growth and that could constrain spending power this holiday season. Unprecedented numbers of Americans are expected to hit stores this Black Friday, but they are likely to curtail their spending as they find fewer bargains from tariff-hit retailers.

Black Friday also kicks off Europe's crucial Christmas shopping season. Although in Britain, Finance Minister Rachel Reeves may have ruined the mood by hiking the tax burden to a post-war high to meet her deficit-reduction targets. Big investors have broadly welcomed Reeves' budget but they are warning it may not be enough if growth falters.

Speaking of growth, Europe needs to find more of it at home. That was the message from Philip Lane, Chief Economist at the European Central Bank, when he joined  me on the Reuters Econ World podcast this week. Even without U.S. tariffs, the tables have turned in global trade, with China now a competitor not a customer for European exporters. We also talked about inflation, the dollar and Ireland's chances of qualifying for the World Cup. Listen to the full show here.

And finally, remember China's property crisis? It has not gone away. China Vanke Co, a state-backed property developer, is proposing delaying repayment on a local bond, a move that could trigger a new wave of anxiety in both financial and property markets.

Before I sign off, if you are looking for a holiday gift for friends and family on Black Friday, maybe consider a Reuters subscription. You get unlimited access to all stories and fewer ads. Plus, no surprise price increases, and you can cancel anytime. Sign up here.

As always, I'd love to hear from you by hitting reply on this email or finding me on LinkedIn.  

Gold is on track for its best year since 1979. So who's doing the buying? It turns out crypto giant Tether has been scooping it up at a rapid clip this year. The company behind the USDT stablecoin is now the largest single holder of bullion outside the big central banks according to a recent column by Mike Dolan.

" The comparative advantage pattern in the world has turned. China's now very strong in lots of sectors. So, regardless of the geopolitics, there's also a basic economic reality. The kind of route of attractiveness of exporting versus domestic sales has changed."

Philip Lane, chief economist at the European Central Bank.

On this week's show, I speak to Philip Lane, the chief economist at the European Central Bank, about global trade, inflation and the dollar. Listen here.

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