Cost of Giving Thanks Soars

Merrill Lynch’s David Rosenberg has issued his firm’s annual calculation of what he calls their “Thanksgiving cost-of-giving” index, which includes prices for turkey, cranberries, sweet potatoes, pumpkin pies, flowers, gifts ranging from toys to clothing to electronics, gasoline, hotels, air fares and of course, greeting cards.

Rosenberg’s conclusion: the cost of giving thanks is up 7.9% from a year ago, more than double the historic trend line, the second highest increase since 1999 and a huge reversal from the 4.4% drop in 2006.

This would almost be funny, except the consequences are a lot less funny. Writes Rosenberg:

The payback from the drain on disposable income due to the rising cost of the festive season could be a very weak spending performance in the first quarter of next year. Indeed, that is when our forecast points to the first outright consumer contraction in 16 years, and our research suggests that discretionary stocks are barely priced more than 50-50 for such an event.

Gobble, gobble.