Thursday, July 25, 2024

How does inflation affect the cost of Valentine’s Day celebrations?


With prices soaring to historic levels, Valentine’s Day will likely cost you more this year. But if you’re up for a romantic night, the bill might not be as bad as you think.

According to data from LPL Financial, despite high inflation levels for decades, the holiday remains “relatively reasonable,” compared to inflation in the broader economy. The company’s Valentine’s Day Index, which tracks annual prices for four ways to celebrate — jewelry, a night in, a night out, and a holiday vacation — came in at 7%, near The consumer price index inflation rate is 7.5%..

But beneath the surface, some components of the index cost significantly less and may be better options this year, to avoid breaking the bank. The cost of a night in (home-cooked meal, wine, flowers and dessert) and a night out (dinner at a restaurant, sitter, theater tickets) rose 4.0% and 4.7%, respectively, lower than broader inflation. indexes.

“Fortunately, inflation has not affected Valentine’s Day as much as it has hit the general economy,” Ryan Dettrick, senior market analyst at LPL, said in a note.

According to data from LPL Financial, despite decades of high inflation levels, the holiday remains “relatively reasonable” compared to inflation in the broader economy.

While the prices for dessert, home-cooked meals, and flowers were mostly in line with headline inflation, a glass of wine saw no price increase at all. LPL Financial has confirmed that the Bureau of Labor Statistics specifically tracks the price of wine for home consumption.

Menu items for the home-cooked portion of the night could increase the bill a bit, however, as meat, poultry, fish and eggs have increased by about 12% in 2021. Fruit and vegetable prices are up 5% last year, while the increase in dessert prices has been A little lower at 2%.

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Heart-shaped decoration and a couple sitting at the table in the restaurant, the day before Valentine's Day, in Krakow, Poland on February 13, 2022 (Photo by Jacob Borzeki/Noor Photo via Getty Images)

Valentine’s Day: Heart-shaped decorations and a couple sitting at the table are seen at the restaurant in Krakow, Poland on February 13, 2022 (Photo by Jacob Borzeki/Noor Photo from Getty Images)

Celebrating a vacation may not be the most cost-effective way to tell someone else you love this year. In its data, LPL indicated that the component came in at 11.9% year-on-year, a notable jump above the broader inflation indicator. Meanwhile, jewelry saw prices rise in 2020 and 2021 combined, at 4.1% annually, according to LPL data.

Although some components of Valentine’s Day are still below headline inflation, each component is still at a 10-year high, Dietrick notes. The Labor Department’s Consumer Price Index (CPI), which posted a larger-than-expected 7.5% increase in the year to January, posted the biggest annual jump since 1982.

To add to this, the CPI posted an unexpected 0.6% month-over-month increase, while economists had expected printing to slow.

The National Retail Federation estimated it Valentine’s Day spending is expected to reach $23.9 billion This year, up from $21.8 billion in 2021 and the second highest year ever, according to its annual survey.

And judging by the metrics, that money could drop a lot amid rising inflation.

“In the big picture, Valentine’s Day is the ultimate budget holiday because spending time together is all about it,” Dietrick said. “Inflation cannot be touched.”

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter Tweet embed

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