Grocery “affordability” seems to be a buzzword right now, as many Americans focus on their constantly increasing grocery bill.
With Thanksgiving right around the corner, turkeys and the fixings are said to remain affordable, but other items are as high as ever.
Coffee is the most increased grocery item of 2025, which is up 19 percent. The second most increased item: beef, up 15% from last year.
Customers across the country said they have to buy less this year. Regina Gertsen is among those, saying meat is just too expensive.
Other popular items that have seen price hikes include frozen juice, which is up nine percent. Bananas and condiments have both increased by seven percent.
There are some items that are down, though still pricier than they used to be. Eggs are down 12%, cooking oils are down 3% and canned tuna is down 3% as well.
The Farm Bureau blames low cattle inventory for the high costs. It is at its lowest level in 60 years. Factors like drought and high feed prices lead to lower inventories.
Market owner Neil Luken said that steak and burger prices typically drop in winter, as people buy roasts instead. However, that has yet to happen this year, and ground beef is still above six dollars a pound.
That’s why President Trump unveiled a plan to import more beef from Argentina. In the meantime, switching to chicken won’t save much. The cost of chicken breasts has gone up over a dollar a pound this year.
While eggs and a few things are more affordable, the reality is that prices on most staples remain high.
Every Thursday, WRAL News tracks the prices of groceries across multiple grocery chains in the Triangle. It reflects that some staples like beef and chicken remain high, but there are some that might not break your budget.
From an economist’s point of view, conditions heading into the off-year elections probably didn’t seem so bad on paper. Inflation crept up but wasn’t spiking. Hiring was low but so was firing. Wages were still climbing, and the stock market was making investors feel wealthier.
But voters who showed up to the polls on Tuesday had a different point of view and delivered stinging defeats to Republicans.
“It’s a wake-up call,” polling expert Frank Luntz told MSNBC on Wednesday about the election results. “It’s a wake-up call to Democrats and Republicans. And it’s not the economy. It’s not even inflation because that’s something that’s used by professors and politicians. It is affordability.”
In particular, he pointed to housing and healthcare prices for the upper middle class, while workers who live paycheck to paycheck are focused on food and fuel prices.
In a separate interview with CNN on Wednesday, Luntz also downplayed inflation as an election issue and drew a distinction with affordability.
“The public is voting for candidates that they think will make life more affordable,” he said.
Indeed, democratic socialist Zohran Mamdani won the race to be mayor of New York City with promises to make housing, groceries and transportation more affordable.
Moderate Democrats won gubernatorial races with similar messages too. Virginia governor-elect Abigail Spanberger, for example, targeted rising electricity prices, which have stirred discontent as the state’s AI data center boom has spiked demand for power.
To be sure, inflation has cooled substantially since topping 9% in June 2022. But President Donald Trump’s tariffs have kept it sticky, with the consumer price index ticking back up to 3% in September.
And while overall inflation hasn’t jumped sharply and consistently comes in below Wall Street forecasts, consumers are noticing higher prices at the grocery store for basics like coffee.
“It explains why Trump was able to come back and do exceedingly well back in 2024, because the Democrats did not address affordability,” Luntz told CNN.
So it’s not enough to tout the annual rate of inflation. What matters more is how much prices for bread, milk, cars, homes and insurance are.
Democrats finally discovered that, after getting burned in 2024 and are making big promises to improve affordability, Luntz said.
“But make no mistake, how much you pay at the cash register is going to determine who you vote for in these elections,” he predicted.
For his part, Trump acknowledged affordability was a key issue in the election and ramped up his messaging on the topic while also reaching deals with drugmakers to lower prescription costs.
In addition, the White House has highlighted lower gas prices and prices for Thanksgiving staples at top retailers as well.
“I don’t want to hear about the affordability, because right now, we’re much less,” Trump told reporters Thursday, maintaining that his party is the one doing a better job. “The only problem is the Republicans don’t talk about it.”
As stubborn U.S. inflation continues to drive grocery prices higher in 2025, one surprising exception is emerging this month: the cost of preparing your Thanksgiving meal.
Consumers can expect to spend about 2% to 3% less this year on Turkey Day groceries, according to a recent Wells Fargo analysis of a typical Thanksgiving feast.
Shoppers are likely to pay less this year because the foods that make up a traditional Thanksgiving meal aren’t the ones driving grocery inflation, the bank found. Grocery prices overall rose 2.7% in September from a year ago, according to the latest Consumer Price Index, led by increases in beef, bananas and coffee — none of which are Thanksgiving staples.
“At the heart of the uptick in the CPI’s food-at-home increase is protein, specifically beef and eggs, which are not on the Thanksgiving menu,” Wells Fargo’s analysts said in the report. “Without those items, consumers will find relief in a traditional Thanksgiving meal.”
That may surprise some shoppers, with more than two-thirds saying they’re bracing for a pricier Thanksgiving grocery bill, according to new research from financial services company Empower.
Consumers who stick to store brands are expected to spend a total of about $80 on Thanksgiving dinner ingredients for a meal to feed 10 people, while buying brand-name products could push that amount to $95, the analysis found. That’s based on serving a meal of turkey, stuffing, frozen vegetables, prepared mashed potatoes, gravy, fresh cranberries, dinner rolls, salad mix, and pumpkin pie with whipped cream.
That translates to between roughly $8 and $9.50 per person. Here’s where shoppers will save money this year on typical Thanksgiving foods, according to Wells Fargo:
Retail prices for turkeys are down 3.7% from a year ago
Name-brand frozen vegetables are down 15% in price because of competition from private-label brands
Private-brand dinner rolls have declined 22%, which Wells Fargo attributed to falling demand for bread products
Stuffing, prepared gravy mix and fresh cranberries have dipped between 3% and 4% in price
National brand pumpkin pies cost 3% less
A few items have increased in price, Wells Fargo noted. For instance, the cost of whipping cream has risen 3% from a year ago,
Walmart’s $4 Thanksgiving dinner
Some major grocery chains are touting even more affordable Thanksgiving meals, such as Walmart’s $4 per person holiday dinner package — lower even than the retailer’s $7 deal in 2024.
The price drop isn’t only down to lower ingredient prices. This year, Walmart’s $4 deal includes 23 items, a slightly stingier offering than the 29 items included in last year’s Thanksgiving meal bundle.
Some of the changes include:
One can of Campbell’s cream of mushroom soup in 2025, versus two cans in last year’s package.
No fresh onions or celery
No Jiffy corn muffin mix
Other retailers are also getting in on the budget Thanksgiving train, including Aldi’s $4 per person deal and Target’s roughly $5 per person holiday dinner bundle.
NEW YORK — American shoppers are expected to spend more during this holiday shopping season than last year despite economic uncertainty and rising prices.
The 2025 forecast from the National Retail Federation on Thursday estimates that shoppers will collectively spend between $1.01 trillion and $1.02 trillion in November and December, an increase of 3.7% to 4.2% compared with last year.
Retailers rung up $976 billion in holiday sales last year, the group said.
“We’re seeing really positive behavior and engagement from consumers, ” NRF President and CEO Matthew Shay told reporters on a call Thursday. “In fairness, that’s been somewhat of a surprise.”
But Shay said more Americans are growing selective and they’re focused on discounts. And while spending is expected to be up again, the growth of that spending may be in decline.
That is still greater than the average increase of 3.6% between 2010 to 2019. Americans ramped up spending after that during the coronavirus pandemic. Holiday season sales rose 8.9% in 2020 and soared 12.5% in 2021, according to the NRF.
The group’s holiday forecast is based on economic modeling using various key economic indicators including consumer spending, disposable personal income, employment, wages, inflation and previous monthly retail sales releases. NRF’s calculation excludes automobile dealers, gasoline stations and restaurants to focus on core retail.
Holiday spending accounts for 19% of annual sales for the retail industry, though for some retailers the number is a lot higher, according to the NRF. And consumer spending in the U.S. is monitored closely because it drives about 70% of the nation’s gross domestic product.
The forecast this year, however, arrives during the longest government shutdown in U.S. history. There has been no government data released on the jobs market or retail sales since the shutdown began 37 days ago.
“Forecasting is increasingly challenging in this environment,” Shay acknowledged.
The NRF forecast is in line with other estimates, however, which point to slowing growth.
Mastercard SpendingPulse, which tracks spending across all payment methods including cash, predicts that holiday sales will be up 3.6% from Nov. 1 through Dec. 24. That compares with a 4.1% increase last year.
Deloitte Services LP forecasts holiday retail sales to be up between 2.9% to 3.4% from Nov. 1 through Jan. 31, compared with last year’s 4.2%.
Adobe expects U.S. online sales to hit $253.4 billion this holiday season, representing 5.3% growth. That’s smaller than last year’s 8.7% growth.
Consumer spending in the U.S. has remained resilient even as consumer confidence has eroded.
Mark Matthews, NRF’s chief economist and executive director of research, said consumer behavior is changing with a sharper focus on finding deals. And the frequency of family nights out at a restaurant is on the decline, NRF executives said.
The timing of the government shutdown is “absolutely problematic,” Matthews said, noting that it’s led to a loss in private sector income, which erodes consumer demand.
Spending should recover once the shutdown ends, Matthews said, yet there are broader issues of concern that will not be solved when the government shutdown ends.
The gap between wealthy and lower-income households is widening, according to analysts.
Based on spending from its credit card and bank customers, Bank of America found that spending growth among lower income households rose 0.6% in September compared with the same period last year. Among higher income brackets, spending rose at more than four times that speed, or 2.6%, in September. And wages are growing faster for higher income households.
That is making it more difficult for lower income households to keep up when tariffs and other economic factors are pushing prices higher.
In a separate report this week, Bank of America estimated that U.S. consumers are bearing 50% to 70% of the U.S. tariff costs, and it expects that load to grow.
“We think there is overwhelming evidence that tariffs have pushed inflation higher for consumers,’’ Bank of America economists Stephen Juneau and Aditya Bhave wrote.
At the same time, U.S. companies have announced tens of thousands of job cuts. Some companies have cited rising operational costs from new tariffs under the Trump administration, as well as shifting consumer spending, corporate restructuring, or increased spending on artificial intelligence.
To understand how Americans are faring economically these days, it’s helpful to consider the eleventh letter of the alphabet.
Experts describe the current U.S. economy as “K-shaped,” a reference to the divergent fortunes of wealthier consumers compared with people lower down the ladder. The upward-slanting stroke of the “K” represents the ongoing trend of strong spending and healthy income growth among upper-income Americans.
By contrast, the letter’s lower-slanting stroke points to the multiple financial strains facing low- and middle-income people, from stubborn inflation and prohibitively expensive homes to surging credit card debt and high health insurance costs.
This bifurcation of the economy isn’t a new phenomenon, with inequality on the rise since the 1980s, noted Mark Zandi, chief economist at financial research firm Moody’s Analytics. But the divide in income and wealth has grown more skewed since the pandemic, reflecting the “growing gap between the wealthy and the well-to-do and everyone else,” he said. “It’s taken off.”
Several trends help explain what’s behind the emergence of a K-shaped economy.
Consumer spending
Consumer spending — which drives over two-thirds of economic activity — is growing overall in the U.S. These days, however, a large and growing share of that commercial activity is driven by upwardly mobile Americans. In the second quarter of 2025, the top 10% of income earners accounted for almost half of all spending, according to an analysis of Federal Reserve data by Zandi.
“That group has always accounted for a much larger share of spending, but that share has risen significantly over time, and now is the highest it’s ever been in the data,” he told CBS News.
Other data tells a similar tale. In September, spending by lower-income households grew 0.6% from a year ago, compared with 2.6% for higher-income consumers, according to a recent report from the Bank of America Institute.
Spending on U.S. luxury fashion was also up 8% year-over-year in October, according to the bank’s data — another sign that wealthier households are driving spending.
“Younger, less affluent households are facing ongoing challenges, while older, wealthier consumers are driving overall spending growth,” said Grace Zwemmer, an associate economist at investment advisory firm Oxford Economics.
Record stock prices
Because much of their income is held in stock and other securities, affluent Americans have particularly benefited from this year’s run-up in financial markets, which have notched record after record largely on the strength of investor excitement about artificial intelligence.
A May Gallup poll found that 87% of Americans who own stock live in households with incomes of $100,000 or more. The top 1% of income earners — who on average earn around $731,000 per year, according to personal finance site SmartAsset — own nearly half of corporate securities and mutual funds, Federal Reserve Bank of St. Louis data shows.
A bullish stock market also benefits the millions of employees with 401(k), mutual funds and other investments, but does much less to lift the many Americans without such holdings, said Tuan Nguyen, an economist at RSM US, an audit, tax and consulting firm.
“For lower- and middle-income people, especially the ones that live paycheck to paycheck, the rally in the equity markets might not be relatable to them because they are facing higher inflation and lower wage growth,” he said.
Of late, better-heeled Americans have also seen stronger pay gains. According to the Bank of America Institute, the rate of wage growth for higher-income households in September rose to 4% year-over-year. Annualized pay growth for lower-income households as of August fell to 0.9%, the lowest since the financial giant started tracking the data in 2016, said Taylor Bowley, an economist at the Bank of America Institute.
What lower-income people “see from the grocery store, from the gas stations, is that prices are going up while their wages are not going up,” Nguyen added.
Lower-income households also face a toxic stew of inflation, credit card debt, student loans and mortgage loans, sapping their spending power. They also feel the pinch of a slowing job market more acutely than high-income groups, Zandi told CBS News.
“They may have a job, although if they lose one, they’re having a harder and harder time getting back into the labor market,” he said.
WASHINGTON (AP) — The Federal Reserve will almost certainly cut its key interest rate on Wednesday and could signal it expects another cut in December as the central bank seeks to bolster hiring.
A cut Wednesday would be the second this year and could benefit consumers by bringing down borrowing costs for mortgages and auto loans. Since Fed chair Jerome Powell strongly signaled in late August that rate cuts were likely this year, the average 30-year mortgage rate has fallen to about 6.2% from 6.6%, providing a boost to the otherwise-sluggish housing market.
Still, the Fed is navigating an unusual period for the U.S. economy and its future moves are harder to anticipate than is typically the case. Hiring has ground nearly to a halt, yet inflation remains elevated, and the economy’s mostly solid growth is heavily dependent on massive investment by leading tech companies in artificial intelligence infrastructure.
The central bank is assessing these trends without most of the government data it uses to gauge the economy’s health. The release of September’s jobs report has been postponed because of the government shutdown. The White House said last week October’s inflation figure may not even be compiled.
The shutdown itself may also crimp the economy in the coming months, depending on how long it lasts. Roughly 750,000 federal workers are nearing a month without pay, which could soon start weakening consumer spending, a critical driver of the economy.
Federal workers laid off by the Trump administration’s Department of Government Efficiency efforts earlier this year may formally show up in jobs data if it is reported next month, which could make the monthly hiring data look even worse.
Powell has said that the risk of weaker hiring is rising, which makes it as much of a concern as still-elevated inflation. As a result, the central bank needs to move its key rate closer to a level that would neither slow nor stimulate the economy.
Most Fed officials view the current level of its key rate — 4.1% — as high enough to slow growth and cool inflation, which has been their main goal since price increases spiked to a four-decade high three years ago. The Fed is widely expected to reduce it to about 3.9% Wednesday. WIth job gains at risk, the goal is to move rates to a less-restrictive level.
Kris Dawsey, head of economic research at D.E. Shaw, an investment bank, said that the lack of data during the shutdown means the Fed will likely stay on the path it sketched out in September, when it forecast cuts this month and in December.
“Imagine you’re driving in a winter storm and suddenly lose visibility in whiteout conditions,” Dawsey said. “While you slow the car down, you’re going to continue going in the direction you were going versus making an abrupt change once you lose that visibility.”
In recent remarks, the Fed chair has made clear that the sluggish job market has become a signficant concern.
“The labor market has actually softened pretty considerably,” Powell said. “The downside risks to employment appear to have risen.”
Before the government shutdown cut off the flow of data Oct. 1, monthly hiring gains had weakened to an average of just 29,000 a month for the previous three months. The unemployment rate ticked up to a still-low 4.3% in August from 4.2% in July.
Layoffs also remain low, however, leading Powell and other officials to refer to the “low-hire, low-fire” job market.
At the same time, last week’s inflation report — released more than a week late because of the shutdown — showed that inflation remain elevated but isn’t accelerating and may not need higher rates to tame it.
Yet a key question is how long the job market can remain in what Powell has described as a “curious kind of balance.”
“There have been some worrisome data points in the last few months,” said Stephen Stanley, chief U.S. economist at Santander, an investment bank. “Is that a weakening trend or are we just hitting an air pocket?”
The uncertainty has prompted some top Fed officials to suggest that they may not necessarily support a cut at its next meeting in December. At its September meeting, the Fed signaled it would cut three times this year, though its policymaking committee is divided. Nine of 19 officials supported two or fewer reductions.
Christopher Waller, a member of the Fed’s governing board and one of five people being considered by the Trump administration to replace Powell as Fed chair next year, said in a recent speech that while hiring data is weak, other figures suggest the economy is growing at a healthy pace.
“So, something’s gotta give,” Waller said. “Either economic growth softens to match a soft labor market, or the labor market rebounds to match stronger economic growth.”
Since it’s unclear how the contradiction will play out, Waller added, “we need to move with care when adjusting the policy rate.”
Waller said he supported a quarter-point cut this month, “but beyond that point” it will depend on what the economic data says, assuming the shutdown ends.
Financial markets have put the odds of another cut in December at above 90%, according to CME Fedwatch — and Fed officials have so far said little to defuse that expectation.
Jonathan Pingle, chief U.S. economist at UBS, said that he will look to see if Powell, at a news conference Wednesday, repeats his assertion that the risks of a weaker job market remain high.
“If I hear that, I think they’re on track to lowering rates again in December,” he said.
WASHINGTON (AP) — Americans are growing increasingly concerned about their ability to find a good job under President Donald Trump, an Associated Press-NORC Center for Public Affairs Research poll finds, in what is a potential warning sign for Republicans as a promised economic boom has given way to hiring freezes and elevated inflation.
High prices for groceries, housing and health care persist as a fear for many households, while rising electricity bills and the cost of gas at the pump are also sources of anxiety, according to the survey.
Some 47% of U.S. adults are “not very” or “not at all confident” they could find a good job if they wanted to, an increase from 37% when the question was last asked in October 2023.
Electricity bills are a “major” source of stress for 36% of U.S. adults at a time when the expected build-out of data centers for artificial intelligence could further tax the power grid. Just more than one-half said the cost of groceries are a “major” source of financial stress, about 4 in 10 said the cost of housing and health care were a serious strain and about one-third said they were feeling high stress about gasoline prices.
The survey suggests an ongoing vulnerability for Trump, who returned to the White House in January with claims he could quickly tame the inflation that surged after the pandemic during Democratic President Joe Biden’s term. Instead, Trump’s popularity on the economy has remained low amid a mix of tariffs, federal worker layoffs and partisan sniping that has culminated in a government shutdown.
Linda Weavil, 76, voted for Trump last year because he “seems like a smart businessman.” But she said in an interview that the Republican’s tariffs have worsened inflation, citing the chocolate-covered pecans sold for her church group fundraiser that now cost more.
“I think he’s doing a great job on a lot of things, but I’m afraid our coffee and chocolate prices have gone up because of tariffs,” the retiree from Greensboro, North Carolina, said. “That’s a kick in the back of the American people.”
Ioan Barsan a recruiter with the Miami Dade School Police Dept. talks to a a job seeker during a job fair Wednesday, Oct. 1, 2025, in Miami. (AP Photo/Marta Lavandier)
Ioan Barsan a recruiter with the Miami Dade School Police Dept. talks to a a job seeker during a job fair Wednesday, Oct. 1, 2025, in Miami. (AP Photo/Marta Lavandier)
Voters changed presidents, but they’re not feeling better about Trump’s economy
The poll found that 36% of U.S. adults approve of how Trump is handling the economy, a figure that has held steady this year after he imposed tariffs that caused broad economic uncertainty. Among Republicans, 71% feel positive about his economic leadership. Yet that approval within Trump’s own party is relatively low in ways that could be problematic for Republicans in next month’s races for governor in New Jersey and Virginia, and perhaps even in the 2026 midterm elections.
At roughly the same point in Biden’s term, in October 2021, an AP-NORC poll found that 41% of U.S. adults approved of how he was handling the economy, including about 73% of Democrats. That overall number was a little higher than Trump’s, primarily because of independents — 29% approved of how Biden was handling the economy, compared with the 18% who currently support Trump’s approach.
The job market was meaningfully stronger in terms of hiring during Biden’s presidency as the United States was recovering from pandemic-related lockdowns. But hiring has slowed sharply under Trump with monthly job gains averaging less than 27,000 after the April tariff announcements.
People see that difference.
Four years ago, 36% of those in the survey were “extremely” or “very” confident in their ability to get a good job, but that has fallen to 21% now.
Biden’s approval on the economy steadily deteriorated through the middle of 2022 when inflation hit a four-decade high, creating an opening for Trump’s political comeback.
President Donald Trump walks with Air Force Col. Christopher M. Robinson, Commander of the 89th Airlift Wing, from Marine One to board Air Force One, Friday, Oct. 17, 2025, at Joint Base Andrews, Md., for a trip to Florida. (AP Photo/Mark Schiefelbein)
President Donald Trump walks with Air Force Col. Christopher M. Robinson, Commander of the 89th Airlift Wing, from Marine One to board Air Force One, Friday, Oct. 17, 2025, at Joint Base Andrews, Md., for a trip to Florida. (AP Photo/Mark Schiefelbein)
Electricity costs are an emerging worry
In some ways, Trump has made the inflation problems harder by choosing to cancel funding for renewable energy projects and imposing tariffs on the equipment needed for factories and power plants. Those added costs are coming before the anticipated construction of data centers for AI that could further push up prices without more construction.
Even though 36% see electricity as a major concern, there are some who have yet to feel a serious financial squeeze. In the survey, 40% identified electricity costs as a “minor” stress, while 23% said their utility bills are “not a source” of stress.
Kevin Halsey, 58, of Normal, Illinois, said his monthly electricity bills used to be $90 during the summer because he had solar panels, but have since jumped to $300. Halsey, who works in telecommunications, voted Democratic in last year’s presidential election and described the economy right now as “crap.”
“I’ve got to be pessimistic,” he said. “I don’t see this as getting better.”
At a fundamental level, Trump finds himself in the same economic dilemma that bedeviled Biden. There are signs the economy remains relatively solid with a low unemployment rate, stock market gains and decent economic growth, yet the public continues to be skeptical about the economy’s health.
Some 68% of U.S. adults describe the U.S. economy these days as “poor,” while 32% say it’s “good.” That’s largely consistent with assessments of the economy over the past year.
In addition, 59%, say their family finances are “holding steady.” But only 12% say they’re “getting ahead,” and 28% say they are “falling behind.”
People see plenty of expenses but few opportunities
The sense of economic precarity is coming from many different directions, with indications that many think middle-class stability is falling out of reach.
The vast majority of U.S. adults feel at least “minor” stress about the cost of groceries, health care, housing, the amount they pay in taxes, what they are paid at work and the cost of gas for their cars.
In the survey, 47%, say they are “not very” or “not at all” confident they could pay an unexpected medical expense while 52% have low confidence they will have enough saved for their retirement. Also, 63%, are “not very” or “not at all” confident they could buy a new home if they wanted to.
Young adults are much less confident about their ability to buy a house, though confidence is not especially high across the board. About 8 in 10 U.S. adults under age 30 say they are “not very confident” or “not at all confident” they would be able to buy a house, compared with about 6 in 10 adults 60 and older.
For 54% of U.S. adults, the cost of groceries is a “major source” of stress in their life right now.
Unique Hopkins, 36, of Youngstown, Ohio, said she is now working two jobs after her teenage daughter had a baby, leaving Hopkins with a sense that she can barely tread water as part of the “working poor.” She voted for Trump in 2016, only to switch to Democrats after she felt his ego kept him from uniting the country and solving problems.
“It’s his way or no way,” she said. “Nobody is going to unite with Trump if it’s all about you, you, you.”
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The AP-NORC poll of 1,289 adults was conducted Oct. 9-13, using a sample drawn from NORC’s probability-based AmeriSpeak Panel, which is designed to be representative of the U.S. population. The margin of sampling error for adults overall is plus or minus 3.8 percentage points.
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This story has been corrected to reflect that the name of the NORC Center is NORC Center for Public Research, not Public Affairs.
Americans are expected to open their wallets this holiday season, increasing their gift budgets even as a slowing job market and stubborn inflation weigh on consumer confidence, according to a new analysis from Visa Business and Economic Insights.
U.S. consumers are forecast to spend an average of $736 each on holiday gifts, a 10% increase from the $669 reported last year, Visa said in its 2025 holiday spending outlook.
Inflation partly explains this year’s projected sales growth, with the Consumer Price Index showing that prices rose 3% on an annual basis in September. But Americans are also planning on upping their gifting, especially older consumers, with baby boomers forecasted to boost their holiday spending by 21%, the study found.
The robust spending outlook highlights consumers’ resilience, even as confidence surveys paint a more cautious picture.
“We are clearly seeing consumers spend in a far better, more robust way than what we’re seeing in the consumer sentiment and confidence data,” Michael Brown, a principal U.S. economist at Visa, told CBS News.
Visa tapped retail sales data from the U.S. Department of Commerce — excluding automobiles, gas stations and restaurants — for its holiday spending projections.
In the years leading up to the pandemic, changes in consumer spending corresponded more closely with consumer sentiment, Visa’s analysis shows. But that link has weakened in recent years. In April, for example, when consumer confidence fell to its lowest level since the pandemic, real consumer spending increased 3.1% on an annual basis, the Visa report points out.
Consumers continue to express dour views about the economy, with sentiment falling for a third consecutive month in October due to worries about a weaker job market and rising inflation, according to the latest University of Michigan sentiment index. Another measure from the Conference Board, a nonprofit group, also shows confidence in the economy edged down slightly this month.
What explains the disconnect? Steady wage gains have kept spending aloft, with many Americans continuing to shop despite higher prices because their take-home pay remains solid, Brown said.
Other holiday outlook forecasts from groups like Abode for Business and polling firm Gallup point to the same conclusion as Visa’s: Americans are planning to dish out billions on holiday gifts, travel and food despite their gloomy views on the economy.
Still, some are exercising caution in their purchasing, Brown said, noting that low- and middle-income households will face the biggest tradeoffs this holiday season. Higher costs for essentials such as groceries are leaving them with less room for discretionary spending, he added.
“There is absolutely an undercurrent of trying to make the dollar stretch, given some of those necessities are costing a bit more this season,” Brown said.
WASHINGTON (AP) — The Federal Reserve cut its key interest rate Wednesday for a second time this year as it seeks to shore up economic growth and hiring, even as inflation stays elevated.
But Fed Chair Jerome Powell also cautioned that further rate cuts weren’t guaranteed, citing the government shutdown’s interruption of economic reports and sharp divisions among 19 Fed officials who participate in the central bank’s interest-rate deliberations.
Speaking to reporters after the Fed announced its rate decision, Powell said there were “strongly differing views about how to proceed in December” at its next meeting and a further reduction in the benchmark rate is not “a foregone conclusion — far from it.”
The rate cut — a quarter of a point — brings the Fed’s key rate down to about 3.9%, from about 4.1%. The central bank had cranked its rate to roughly 5.3% in 2023 and 2024 to combat the biggest inflation spike in four decades before implementing three cuts last year. Lower rates could, over time, reduce borrowing costs for mortgages, auto loans, and credit cards, as well as for business loans.
The move comes amid a fraught time for the central bank, with hiring sluggish and yet inflation stuck above the Fed’s 2% target. Compounding its challenges, the central bank is navigating without the economic signposts it typically relies on from the government, including monthly reports on jobs, inflation, and consumer spending, which have been suspended because of the government shutdown.
Financial markets largely expected another rate reduction in December, and stock prices dropped after Powell’s comments, with the S&P 500 nearly unchanged and the Dow Jones Industrial Average closing slightly lower.
“Powell poured cold water on the idea that the Fed was on autopilot for a December cut,” said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities. “Instead, they’ll have to wait for economic data to confirm that a rate cut is actually needed.”
Powell was asked about the impact of the government shutdown, which began on Oct. 1 and has interrupted the distribution of economic data. Powell said the Fed does have access to some data that give it “a picture of what’s going on.” He added that, “If there were a significant or material change in the economy, one way or another, I think we’d pick that up through this.”
But the Fed chair did acknowledge that the limited data could cause officials to proceed more cautiously heading into its next meeting in mid-December.
“There’s a possibility that it would make sense to be more cautious about moving (on rates). I’m not committing to that, I’m just saying it’s certainly a possibility that you would say ‘we really can’t see, so let’s slow down.’”
The Fed typically raises its short term rate to combat inflation, while it cuts rates to encourage borrowing and spending and shore up hiring. Right now it sees risks of both slowing hiring and rising inflation, so it is reducing borrowing costs to support the job market, while still keeping rates high enough to avoid stimulating the economy so much that it worsens inflation.
Yet Powell suggested the Fed increasingly sees inflation as less of a threat. He noted that excluding the impact of President Donald Trump’s tariffs, inflation is “not so far from our 2% goal.” Inflation has slowed in apartment rents and for many services, such as car insurance. A report released last week showed that inflation remains elevated but isn’t accelerating.
The government recalled employees to produce the report, despite the shutdown, because it was used to calculate the cost of living adjustment for Social Security.
At the same time, the economy could be rebounding from a sluggish first half, which could improve job growth in the coming months, Powell said. That would make rate cuts less necessary.
“For some part of the committee, it’s time to maybe take a step back and see if whether there really are downside risks to the labor market,” Powell said. “Or see whether in fact that the stronger growth that we’re seeing is real.”
Two of the 12 officials who vote on the Fed’s rate decisions dissented Wednesday, but in different directions. Jeffrey Schmid, President of the Federal Reserve Bank of Kansas City, voted against the move because he preferred no change to the Fed’s rate. Schmid has previously expressed concern that inflation remains too high.
Fed governor Stephen Miran dissented for the second straight meeting in favor of a half-point cut. Miran was appointed by President Donald Trump just before the central bank’s last meeting in September.
Trump has repeatedly attacked Powell for not reducing borrowing costs more quickly. In South Korea early Wednesday he repeated his criticisms of the Fed chair.
“He’s out of there in another couple of months,” Trump said. Powell’s term ends in May. On Monday, Treasury Secretary Scott Bessent confirmed the administration is considering five people to replace Powell, and will decide by the end of this year.
The Fed also said Wednesday that it would stop reducing the size of its massive securities holdings, which it accumulated during the pandemic and after the 2008-2009 Great Recession. The change, to take effect Dec. 1, could over time slightly reduce longer-term interest rates on things like mortgages but won’t have much overall impact on consumer borrowing costs.
Without government data, the economy is harder to track, Powell said. September’s jobs report, scheduled to be released three weeks ago, is still postponed. This month’s hiring figures, to be released Nov. 7, will likely be delayed and may be less comprehensive when finally released. And the White House said last week that October’s inflation report may never be issued at all.
Before the government shutdown cut off the flow of data, monthly hiring gains had weakened to an average of just 29,000 a month for the previous three months, according to the Labor Department’s data. The unemployment rate ticked up to a still-low 4.3% in August from 4.2% in July.
More recently, several large corporations have announced sweeping layoffs, including UPS, Amazon, and Target, which threatens to boost the unemployment rate if it continues. Powell said the Fed is watching the layoff announcements “very carefully.”
___
Associated Press Writer Alex Veiga in Los Angeles contributed to this report.
NEW YORK — Amazon posted higher fiscal third quarter profit and sales compared with a year ago, as the online giant kept attracting shoppers looking for good prices while inflation resurges.
The results announced Thursday beat Wall Street expectations. The company’s prominent cloud computing arm also surpassed analysts’ expectations. But Amazon issued a cautious sales outlook for the fiscal fourth quarter, citing overall economic uncertainty and President Donald Trump’s tariffs. But shares soared close to 9% in after-hours trading.
Amazon posted net income of $21.12 billion, or $1.95 per share, for the quarter ended Sept. 30. That’s up from $15.33 billion, or $1.43 per share, a year ago.
Analysts had expected $1.57 per share for the quarter, according to FactSet.
Amazon’s sales rose to $180.2 billion, up from $158.88 billion in the year ago period.
Analysts had expected $177.91 billion, according to FactSet.
Amazon has announced it’s cutting about 14,000 corporate jobs as it ramps up spending on artificial intelligence and cuts costs elsewhere. Teams and individuals impacted by the job cuts were notified Tuesday. Amazon has about 350,000 corporate employees and a total workforce of about 1.56 million. The cuts announced Tuesday amount to about a 4% reduction in its corporate workforce.
Analysts are dissecting Amazon’s results to get insight into consumer behavior for the holiday shopping season and how Trump’s tariffs are impacting prices.
The average rate on a 30-year U.S. mortgage fell for the fourth week in a row to its lowest level in more than a year.
Lower mortgage rates boost homebuyers’ purchasing power. They also benefit homeowners eager to refinance their current home loan to a more attractive rate.
The average long-term mortgage rate dropped to 6.17% from 6.19% last week, mortgage buyer Freddie Mac said Thursday. A year ago, the rate averaged 6.72%.
The last time the average rate was lower was on Oct. 3, 2024, when it was 6.12%.
Borrowing costs on 15-year fixed-rate mortgages, popular with homeowners refinancing their home loans, also eased this week. The average rate dropped to 5.41% from 5.44% last week. A year ago, it was 5.99%, Freddie Mac said.
Mortgage rates are influenced by several factors, from the Federal Reserve’s interest rate policy decisions to bond market investors’ expectations for the economy and inflation. They generally follow the trajectory of the 10-year Treasury yield, which lenders use as a guide to pricing home loans.
SEOUL, South Korea (AP) — Samsung Electronics on Thursday reported a 32.5% increase in operating profit for the third quarter, driven by rebounding demand for its computer memory chips, which the company expects will continue to grow on the back of artificial intelligence.
The South Korean technology giant set a new high in quarterly revenue, which rose nearly 9% to 86 trillion won ($60.4 billion) for the July-September period, fueled by increased sales of semiconductor products and mobile phones.
Samsung, which has dual strength in both components and finished products, said it expects the demand driven by AI to further expand market opportunities in coming months. SK Hynix, another major South Korean chipmaker, also reported a record operating profit of 11.4 trillion won ($8 billion) on Wednesday, which it also described as AI-related growth.
Samsung’s operating profit of 12.2 trillion won ($8.6 billion) in the last quarter marked a 160% increase from the previous quarter, when it said its semiconductor earnings were weighed down by inventory value adjustments and one-off costs related to technology export restrictions on China.
Samsung’s semiconductor division posted 7 trillion in operating profit for the third quarter, with the company reporting strong sales in high bandwidth memory chips, which are used to power AI applications.
“The semiconductor market is expected to remain strong, driven by ongoing AI investment momentum,” the company said in a statement. The company said an advanced version of its high-bandwidth memory chips, the HBM3E, is “currently in mass production and being sold to all relevant customers,” while samples of its next-generation product, the HBM4, are being shipped to key clients.
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President Donald Trump says he’s improved Americans’ lives when it comes to the economy and inflation, two areas that polls show are top of mind for voters.
“Energy costs are way down,” Trump told service members on the USS George Washington in Japan on Oct. 28. “Gasoline prices are way down. Grocery prices are way down. We have a little problem with beef. We’re gonna get that down very quickly. But the prices are way down. … Inflation has been defeated.”
He also said at a lunch in South Korea the next day, “We’re down to a very low rate of inflation, 2.7%,” calling it “almost a perfect number.” It’s actually 3%.
Two days earlier, Treasury Secretary Scott Bessent also touted the administration’s progress on inflation.
“When we came in, it was ‘egg-flation, egg-flation, egg-flation,’” Bessent said Oct. 26 on NBC’s “Meet the Press.” “You know, egg prices are down. Gasoline prices are down. Overall, the inflation since President Trump has come in has come down.”
On eggs and gasoline, Bessent has a point. Since December 2024, the month before Trump entered office, the price of eggs has fallen. And since the week of Trump’s Jan. 20 inauguration, the price of gasoline has declined from $3.11 to $3.03 a gallon. (Trump was less accurate: Energy, especially electricity, is up, as are groceries. Trump was correct that prices of both ground beef and steaks are up.)
But it’s possible to find particular items with falling prices even as inflation as a whole rises. Is Bessent right that inflation “has come down” overall?
It depends on what metric you use. The most basic overall measure of inflation is steady, or even up a little bit, depending on the time frame. But an inflation measure that excludes volatile food and energy costs is down slightly.
The White House did not respond to an inquiry for this article.
The most basic measure shows that overall inflation hasn’t fallen
We first turned to the consumer price index, a widely tracked metric from the federal Bureau of Labor Statistics. While the federal government has paused calculating some key economic statistics during the ongoing shutdown, it still reported the consumer price index for September in order to produce an annual cost-of-living adjustment for Social Security.
When economists study inflation, they typically look at the change in the consumer price index compared with one year earlier. Using this metric, inflation isn’t down under Trump.
During Trump’s first three full months in office — February, March and April — the year-over-year inflation rate fell each month. It began rising in May, June, July and September. (Inflation remained steady in August, but it didn’t fall.)
By September, the year-over-year inflation rate was 3% — right where it started in January (when Joe Biden turned over the presidency to Trump) and slightly higher than the 2.9% rate in December 2024, Biden’s last full month in office. The current 3% rate is higher than it was during the final six months of Biden’s term.
Either way, by this metric, inflation did not come down under Trump. The upward pattern of the most recent data points are worrisome, said Douglas Holtz-Eakin, president of the center-right American Action Forum.
After 40-year-high levels of inflation in 2022 under Biden, the Federal Reserve “had engineered a remarkably successful path to return to 2 percent, which has been disrupted by, especially, Trump’s tariffs,” Holtz-Eakin said. “Now, inflation is at 3 percent and rising. I expect it to keep rising.”
Calculating inflation beyond food and energy does show a modest drop
To better grasp what’s going on with inflation, economists sometimes prefer to strip out the volatile sectors of food and energy. When those are removed from the analysis, Bessent has a point: Inflation has eased under Trump, at least modestly.
The inflation rate minus food and energy was 3% year over year in September — lower than either December 2024 (3.2%) or January 2025 (3.3%).
Under Trump, wages are outpacing inflation
Price increases matter most to people when their wages aren’t keeping up.
During virtually all of Biden’s term, wages failed to keep pace with inflation.
Trump has a more positive story to tell so far: On his watch, wages are rising faster than prices, compared with their January levels.
However, it’s still early in Trump’s tenure, cautioned the free-market oriented Private Enterprise Research Center at Texas A&M University.
The comparative data on inflation and wages isn’t “all that telling about where we might find ourselves in the coming months,” the center wrote Sept. 22. “The first seven months of a 48-month term in office is much too short to render judgement.” The center also said Trump’s tariff policies could reverse some of these trends.
Our ruling
Bessent said, “Overall, the inflation since President Trump has come in has come down.”
Overall, year-over-year inflation has risen modestly to 3% on Trump’s watch, compared with 2.9% in Biden’s last full month in office. After stripping out volatile food and energy prices, which economists often do to analyze price patterns, the inflation rate has declined modestly under Trump, from 3.2% in Biden’s last full month in office to 3% now under Trump.
Wages have outpaced inflation under Trump, although economists warn that his tariff policies could put that achievement at risk.
The statement is partially accurate but leaves out important details, so we rate it Half True.
Back in May, I spent a morning at a family-owned pharmacy in Hanover County — a locality that voted for President Donald Trump in 2024 by a margin of more than 25 points.
I was there alongside local pharmacists and students, a Hanover County mother whose daughter is battling cancer, and a crush of reporters to roll out my plan to lower Virginians’ healthcare and prescription drug costs as their next governor. The event caught the attention of some community members who greeted me donning red T-shirts, Make America Great Again hats and Trump campaign buttons.
Among the group was a local Tea Party member. After we briefly joked about our party allegiances, the conversation quickly turned to the issues.
Democratic gubernatorial candidate Abigail Spanberger addresses a get-out-the-vote rally on the first day of early voting outside the Eastern Government Center on Sept. 19, 2025, in Henrico County, Virginia.(Chip Somodevilla/Getty Images)
His daughter, who had been battling cancer, had recently lost her healthcare benefits. As her pile of medical bills and worries grew, so had his frustration.
What started as him leaving home on a rainy Wednesday morning to hold me accountable turned into a meaningful conversation about one of the challenges I hear about most from families, veterans, seniors and young people across our commonwealth — the rising cost of medical care.
But it’s not just high healthcare costs that are keeping Virginians up at night. Everywhere I travel across the commonwealth — since I first launched my campaign to serve as Virginia’s next governor, the No. 1 challenge Virginians share with me is the squeeze of high costs. Rising rent and mortgage payments, energy bills, and prices at the pharmacy counter are stretching Virginians’ paychecks thin. Virginians who are working hard to get by deserve a governor who is laser-focused on doing everything in her power to deliver them real relief.
Right now, as we race toward Election Day, I’m on the road for my 40-plus-stop, 11-day statewide bus tour. We’re going everywhere from “Where Virginia Begins” in Lee County up to Leesburg, from Norfolk to Nelson County to lay out the stakes in this year’s elections — because this year, Virginians have the opportunity to choose leadership that actually puts our commonwealth first.
Virginia Democratic gubernatorial candidate Abigail Spanberger speaks during an Everytown for Gun Safety rally on April 10, 2025, in Alexandria, Virginia. (Win McNamee/Getty Images)
Since that rainy morning in May, I’ve also rolled out my plans to lower Virginians’ housing costs and Virginians’ energy bills. I’ve rolled out my plans to grow workforce training opportunities — because a four-year degree isn’t the right path for everyone. And I’ve rolled out my plan to make sure Virginia’s public schools are the best in the nation. My opponent — Winsome Earle-Sears, the current lieutenant governor of Virginia — has not shown an inkling of interest in tackling these challenges. She’s laid out no real plans to make Virginia more affordable or grow our economy.
Virginians — including the more than 300,000 federal employees who call our commonwealth home — are grappling with the consequences of the Trump administration’s DOGE firings, use of this devastating government shutdown to escalate those firings, and unpredictable tariffs. My opponent dismissed the devastating impacts of these cuts on Virginia’s economy and even mocked Virginians for worrying about losing their jobs. As Virginia’s next governor, I am clear-eyed about threats to our commonwealth — and I will always stand up for Virginians’ jobs and Virginia’s economy.
If you’re a registered voter in Virginia, my name is on your ballot this year. You may still be making your mind up about who to trust with your vote. You might even be reading this right now and thinking, “I’m a Republican, so why would I vote for a Democrat?”
Abigail Spanberger, Virginia Democratic Party nominee for governor, speaks at a campaign event in Richmond on April 8, 2025.(Max Posner/The Washington Post/Getty Images)
I won my first campaign in 2018 — in a district that hadn’t elected a Democrat in 50 years — in part because thousands of Virginians asked themselves that very question. And ultimately, those voters believed in electing a leader who would put the people of Virginia — not a political party, not a group of donors and not a president — first.
Since I first got into politics, I’ve been focused on addressing some of the most pressing issues facing Virginia’s families and businesses — from protecting Virginians’ access to healthcare coverage to bringing down the cost of living to keeping our communities safe. My focus hasn’t changed — and I’m ready to get to work on day one to deliver for Virginians.
And like I always say: I might be a Democrat, but you don’t have to be one to vote for me. I would be honored to earn your vote and grateful to serve as your governor.
Former Congresswoman Abigail Spanberger represented Virginia’s 7th District in the U.S. House of Representatives from 2019 to 2025. She is a former federal law enforcement officer and former CIA case officer. She is now the Democratic nominee for governor of Virginia.
Trick-or-treaters hoping the trend is temporary are likely to be disappointed, as climate change and other factors are expected to make higher cocoa prices a new long-term reality. Companies trying to manage sky-high prices for ingredients can only pass along so much of the cost to consumers, so they have turned to portion sizes, alternate ingredients and other strategies as well.
Candy makers get creative as cocoa costs stay high
Cocoa prices have more than doubled over the past two years due to poor weather and crop disease in West Africa, which supplies more than 70% of the world’s cocoa.
The North American benchmark price for a tonne of cocoa stood at US$6,207 on Wednesday, according to the International Cocoa Organization, which releases a daily average of futures prices for the commodity in London and New York. That’s down from December’s peak of US$11,984, but it’s still 60% higher than two years ago. Prices had held steady at around US$2,500 for more than a decade leading up to 2023.
“It has come down a little bit from its peak, but it’s still almost triple what it used to be,” said Jo-Ann McArthur, president of Nourish Food Marketing. “You can’t absorb that as a manufacturer.”
Signs of a pivot have already emerged. Hershey Co. launched chocolate nuggets filled with pumpkin spice latte flavour this fall, while its Reese’s peanut butter cups got a Halloween makeover with werewolf tracks—substituting half the chocolate coating with vanilla cream. (Some of these new variations are not yet available in Canada.)
With the nuggets, “they’ve used that filling to really change the composition of the Halloween candy to reduce the amount of chocolate,” McArthur said. “They’re turning a negative into a positive. That’s clever product innovation.”
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Climate and economic factors point to lasting cocoa challenges
Some chocolate makers are also using cocoa substitutes, such as chocolate powder or a shea butter mix to reduce ingredient costs, McArthur said. “You’re going to have to fundamentally use less cocoa, less chocolate,” she said. “With climate change, this is probably a long-term phenomenon.”
Climate scientist Anna Lea Albright said climate change-induced heavy rainfalls in West Africa are affecting cocoa yields. “We find that heavy rainfall is damaging, so in a very broad sense, that poses a risk to cocoa production without adaptation,” said Albright, an environmental fellow at Harvard University’s Center for the Environment.
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On top of that, factors such as El Niño are factors in year-to-year variation, she added.
Environmental impacts are making cocoa pricing more volatile. According to the International Cocoa Organization, prices surged in early June on concerns about production in Ivory Coast but eased on optimistic forecasts for production in Ghana and Latin America. They rose again in late June after heavy rains in West Africa, which could worsen the outbreak of diseases that harm crops.
Albright said other non-climatic factors, such as rising fertilizer costs, are also adding to cocoa supply disruptions.
“It’s going to be challenging for any manufacturers who use cocoa in their products,” said Tim Webb, partner for supply chain and procurement at KPMG in Canada. “It’s unlikely that cocoa prices will return to more normalized levels given tight supplies, tariffs, and the added compliance cost of tracing and disclosing cocoa supplies,” he said.
Rising costs squeeze chocolate makers and consumers alike
Some chocolate makers raised prices to adjust to the rising ingredient costs earlier this year, while others have downgraded their sales estimates as consumer demand wanes.
Chocolate maker Lindt & Spruengli AG, a global powerhouse, in July reported higher cocoa costs and lower volumes in its mid-year report, with the slower sales largely concentrated in North America.
Hershey’s, meanwhile, announced earlier this year it was raising its retail prices, and in some cases, shrinking the packaging with the same price. The price increases, however, were not reflected in Halloween packaging.
The average price increases were in the low double-digit percentages to make up for the higher cost of cocoa and other ingredients. Prices of confectionary products rose 9.2% in September, compared with 5.8% the previous month, Statistics Canada reported on Tuesday.
New York (CNN) — Even the joy of Halloween will cost more this year, with less chocolate than in years past.
Expect more packages of tangy gummies, riding off a meteoric high last year. Your kid’s trick-or-treat bag may be filled with a lot of pumpkin-spice-filled-anything. And like last year, cocoa bean industry experts are expecting high price tags to be passed down to consumers.
Andwith high cocoa prices, every producer from specialty chocolate makers to candy giants are changing up how they sell their treats. For consumers, this could mean less chocolate per package, higher prices and less cocoa content – meaning less chocolate-y chocolate – compared to before.
Overall, candy is 10.8% more expensive this Halloween season than last year,according to an analysis of NielsenIQ data conducted by progressive think tank Groundwork Collaborative and shared first with CNN. That’s nearly quadruple the overall rate of inflation.
In 2024, Halloween candy prices only rose 2.1%, the analysis found.
Halloween spending is no fun-sized matter. Americans shelled out $7.4 billion in Halloween chocolate and candy sales in 2024, a 2.2% increase from 2023, the National Confectioners Association said.
Escazú Chocolates co-owner receives Venezuelan cacao beans in Raleigh, North Carolina, in July. Credit: Courtesy Escazú Chocolates via CNN Newsource
Escazú Chocolates, a bean-to-bar chocolate shop in Raleigh, North Carolina, sources most of its beans from Latin America. The shop said it has always worked with smaller farmers and paid them three to four times the commodity price of cacao – which essentially sets the minimum wage. The spike in prices has pushed up what Escazú pays those workers as well.
Other cost-cutting measures include offering a smaller hot chocolate size, advertising non-chocolate ice cream toppings and moving to a cheaper location in Raleigh to save on rent.
And like many small businesses in America, Escazú is being hit by President Donald Trump’s tariffs, affecting not just the chocolate, but also aluminum in its packaging.
“The tariffs have hit every single every single piece of what goes into every single thing,” Tiana Young, co-owner of Escazú, told CNN. “There is no new normal.”
Pistachio ghosts and blood orange pistachio chocolate confections at Escazú Chocolates. Credit: Courtesy Escazú Chocolates via CNN Newsource
Halloween treats may look — and taste — a little different
Most Americans are not shopping at bean-to-bar specialty shops for Halloween candy. But even consumers of mass-produced candy can taste – and see – the difference compared to a few years ago.
Wells Fargo economist David Branch said users can expect to see more shrinkflation. Hershey told its retail partners in May that it would adjust its “price pack architecture,” corporate-speak for reducing the amount of product in a package so customers don’t feel like they’re paying more for chocolate.
Some specialty chocolate makers are also reducing the cocoa content in their bars and increasing the sugar, like selling a bar with 65% cocoa content instead of 75%.
A family shops for Halloween candy at a Walmart Supercenter on October 16, 2024 in Austin, Texas. Credit: Brandon Bell / Getty Images via CNN Newsource
Gummy candy and rising cocoa prices enjoy a sort of symbiotic relationship. Younger customers have been gravitating toward chewy, sweet treats – sales of sour candy, for example, grew 7% year over year, according to the National Confectioners Association. By making more gummies and less chocolate, candy companies appeal to those sugar- craving customers while saving their profit margins.
Companies are also launching special flavors that aren’t as reliant on chocolate — for example, cinnamon-toast-flavored KitKats help save on chocolate costs.
“We’re seeing more specialty products come out where they add the lower cost (fillings),” Branch said.
Candy by the numbers
Branch said that customers can expect to pay as much as last year for Halloween chocolate this year – if not more – up until Valentine’s Day. Although cocoa prices have fallen since the end of 2024, most producers are selling candy manufactured from the beans they bought during that peak. And costs in other sectors, such as energy and packaging, have also driven up costs.
Halloween candy in Brunswick, ME, in October 2021. Credit: Derek Davis/Portland Press Herald / Getty Images via CNN Newsource
But at the core of it, it’s the beans.
Skyrocketing prices of cocoa beans have driven up costs in the chocolate industry. Worldwide cocoa futures rose a whopping 178% in 2024 from a year prior, after a 61% increase in 2023, according to FactSet. The problem traces back to Ghana and the Ivory Coast, which together produce 60% of the world’s cocoa and have been slammed by poor harvests due to climate change.
Sun-dried cocoa beans inside a warehouse in Assin Foso, Ghana, November 20, 2024. Credit: Francis Kokoroko / Reuters via CNN NewsourceA labourer carries harvested cocoa pods at a farm in Assin Foso, Ghana, November 21, 2024. Credit: Francis Kokoroko / Reuters via CNN Newsource
Though cocoa futures plummeted 46% so far this year, customers are seeing the higher prices now because producers are making chocolate out of those pricey beans harvested in 2024, along with tariffs and inflation costs. And cocoa prices are still way above what they were in 2022.
Groundwork Collaborative found that prices for Hershey’s variety packs rose 22% since last year, Mars variety packs (which contain Milky Way, M&Ms, Three Musketeers and Skittles) rose 12% and Reese’s Peanut Butter cups rose 8%. Even gummies have faced higher prices – the Mondelez gummy candy variety pack, which includes Sour Patch Kids, have risen 9.4%.
In July, Hershey told retailers that it was raising prices for chocolate products by a percentage in the “lower double-digit range.” But the price increase did not include seasonal Halloween candy, the company said.
The Consumer Price Index climbed at an annual rate of 3% in September, coming in below economists’ forecasts as the impact of President Trump’s tariffs remain muted.
By the numbers
Economists polled by financial data firm FactSet had forecast CPI rose at a 3.1% annual clip last month. The CPI measures price changes in a basket of goods and services typically bought by consumers.
While most federal economic data releases have been suspended during the government shutdown, the Department of Labor is making an exception for the September CPI data. That’s because the inflation rate is needed to determine the Social Security Administration’s annual cost-of-living adjustment for beneficiaries, which is also scheduled to be announced on Friday.
The September CPI report could be the last inflation data economists see for a while. The Labor Department is unlikely to release inflation figures next month because of difficulty collecting data during the shutdown, the Trump administration said Friday in an email.
What economists say
Inflation is inching higher partly due to the Trump administration’s tariffs, according to economists. U.S. businesses are eating some of the costs in the form of lower profits, which has blunted the impact of the import duties on consumers.
Still, companies are also passing on as much as 55% of those import taxes to consumers in the form of higher prices, according to a Goldman Sachs analysis. Other research shows a lower rate of passthrough tariff costs to shoppers.
“Tariffs have put upward pressure on prices, particularly in the goods-producing sector of the economy,” Brandon Zureick, senior managing director and chief economist at investment firm Johnson Investment Counsel, told CBS News. “We’re definitely a little higher than where we started the year, and above the Fed’s target” of 2% annual inflation.
Mr. Trump has pointed to tariffs as a tool for protecting U.S. manufacturing, as well as to convince businesses to reshore their factories within the country, and for generating billions of new federal revenue.
Prices today are rising far more slowly than during their peak growth in June 2022, when the CPI hit a 40-year high of 9.1% and set the Federal Reserve on a path of hiking interest rates. Higher borrowing costs can temper inflation because it makes loans and credit cards more expensive, which can cause consumers and businesses to pare spending.
What does the CPI mean for interest rates?
The recent rise in inflation is complicating the Fed’s decision on interest rates, with the central bank scheduled to make its next rate decision on Oct. 29. But today’s inflation data could provide additional support for another cut, analysts said Friday.
“There was little in today’s benign CPI report to ‘spook’ the Fed and we continue to expect further easing at next week’s Fed meeting,” Lindsay Rosner, head of multisector fixed income investing at Goldman Sachs Asset Management, said in a Friday email. “A December rate cut also remains likely with the current data drought providing the Fed with little reason to deviate from the path set out in the dot plot.”
Still, inflation is edging higher, which could be an argument for keeping rates steady. But at the same time, the job market is experiencing a sharp slowdown in hiring, which Fed Chair Jerome Powell cited last month when the central bank made its first rate cut of 2025. Lower borrowing costs can help support the job market by making it cheaper for businesses to borrow, encouraging them to expand and hire.
That means the combination of rising inflation and weakening job growt is putting the Fed’s dual mandate — to keep both inflation and unemployment low — in conflict. Powell said earlier this month that the risks posed by the labor market may be outweighing concerns about rising inflation.
“The Fed has recognized the trends in the labor market as changing their directives,” Zureick said. “We’ve been dangerously close to a zero level of job growth for a few months.”
Given the Fed’s focus on the labor market risks, the higher CPI rate isn’t likely to derail expectations for a quarter-point rate cut at the Fed’s next meeting later this month, economists say.
The probability of a 0.25-percentage point cut at the Fed’s Oct. 29 meeting is pegged at 98.9%, according to CME FedWatch.
