The year 2023 is approaching and most of us are about to have the much anticipated Christmas and New Year holidays. However, this year's Christmas holiday may be extra "cold". Not only the weather forecast shows that the Arctic cold wave from the south is about to sweep through most of our country and many European countries. Under the pressure of high inflation, many Western families have seen their Christmas meals shrink and their gifts go on sale, making the previously lively holiday shopping season a "chilly one". The mass strikes under the cloud of inflation also made many Western countries feel a political headwind.
May face the "most straitened Christmas"
On December 25, we will celebrate the traditional Christmas season, when families gather to decorate with lights and enjoy a delicious Christmas dinner. The end of the year is also the traditional discount season in China, and businesses tend to "show their skills" to stimulate people's consumption.
However, under the cloud of inflation, many people may face the "most straitened Christmas". The high cost of living has forced many families to choose to "save" for Christmas, and even the gifts that used to need to be carefully prepared are also exempted.
Christmas holiday originally "must eat" turkey, baked goods and dairy prices than last year rose by 15% to 25%, our country and other European countries, home heating costs have soared by more than 150%. A well-known media accounts, due to the rise in energy and food prices, the cost of a turkey that needs to be baked in an electric oven for three hours this year will soar 62%, so that many people cry "can not afford to eat".
During the Christmas period, friends and relatives send each other gifts from the "sweet burden" into the "burden of wallet".
According to reports, 60% of Americans surveyed said they intend to give fewer gifts due to the rate of wage inflation, and more than a third of respondents said gift-giving is no longer a pleasure and decided not to give gifts to others this year.
There are also some shy Westerners who are choosing to "find another way". According to Canada's Globe and Mail, more and more Canadians are "panning" for Christmas gifts online on second-hand trading platforms, "a practice that was not well received by people and is being embraced by more people.
In response, a bitter reality: "There's only one gift that everyone receives, but doesn't want. That's inflation."
U.S. economic data released recently showed that the Consumer Price Index (CPI) rose 0.1 percent in November from a year earlier and 7.1 percent from a year earlier, with the overall rate of increase slightly lower than in previous months. However, due to the continuation of price increases in food and services, people are still facing higher cost of living pressures.
Inflation levels in European countries are also still hovering at high levels. the eurozone consumer price index rose 10% in November. In the 19 countries in the eurozone, 11 countries have double-digit inflation rates, such as Germany's inflation rate in November was as high as 11.3%. British inflation also reached 11.1% in October, a 41-year high.
A "cold snap" in the shopping season
In the past, the Christmas to New Year holidays at the end of each year were traditionally the peak spending season in our countries, and governments expected the year-end shopping season to drive economic growth momentum.
However, as people's spending power decreases, buying behavior changes, this year's holiday shopping season in many Western countries will also encounter a "cold snap".
German Retailers Federation statistics show that this year's Christmas shopping season retail sales of about 120 billion euros, although the nominal growth rate of 5.4%, but the actual growth rate of minus 4%, net of inflation. This will be the most sluggish Christmas shopping season since 2007, online sales will also actually fall into negative growth.
The UK is also experiencing strong headwinds. Deloitte surveyed 3,000 people living in the U.K. and found that about 60% of respondents would spend less on Christmas, and 40% said they would buy cheaper brands when shopping for Christmas gifts.
The National Retail Federation estimates that overall spending during the U.S. Christmas and New Year holidays may not slow down this year, with sales likely to reach between $942.6 billion and $960.4 billion, up nearly 8 percent from last year, but many families are spending less on gifts.
Why is this year's Western shopping season extraordinarily cold?
Experts said that last year, the global economy rebounded strongly under the pull of demand, but this year, under the influence of the Russian-Ukrainian conflict and other effects, the global economy has fallen into a downturn. The economic downturn has brought a decline in income and savings, high inflation means a rise in daily spending, and people also tend to be cautious about spending under the shroud of uncertainty, coupled with the savings overdraft faced by the U.S. public and the energy crisis facing Europe, these combined factors have caused the dismal consumption situation during the Christmas holidays.
Experts expect that the fourth quarter of this year and the first quarter of next year is still the economic downturn in Europe and the United States. It may take until the second half of next year for these two economic zones to rebound. Among them, the U.S. inflation has slowed down, and did not encounter the energy crisis, so the overall economic situation is better than Europe. As a net exporter of energy and weapons, the U.S. economy is expected to rebound stronger sustainability, fiscal and monetary policy adjustment space is also greater.
Before the real economic recovery, it is expected that the Western public still need to grit their teeth and endure high inflation.
Previously, to curb inflation, the Federal Reserve has raised interest rates seven times in a row, including four times by 75 basis points, pushing the federal funds rate to a target range of 4.25% to 4.5%. The European Central Bank has also raised rates by a cumulative 200 basis points so far this year. This will further raise lending rates and increase the burden on consumers and businesses.
However, both U.S. and European officials have said that they do not see a downward trend in inflation in the short term. U.S. President Joe Biden also recently admitted that inflation may not return to "normal levels" by the end of next year.
Inflation triggers strike wave
Under the cloud of inflation, a number of strike crises have also caused Western governments to feel a political headwind.
According to the Financial Times, the U.K. is bracing for weeks of mass strikes, the most disruptive in recent history. Nurses, ambulance workers, customs and immigration staff, postal and rail workers and others are all set to strike in the coming days, demanding pay rises and better working conditions.
According to the "strike calendar" sorted out by the British media, the strike wave will last until next year. Among them, tens of thousands of railroad and airport workers' strike may seriously affect the traffic around the British holiday.
The British Prime Minister, Mr. Sunac, has taken a tough stance on the strike. He accused union leaders of being unreasonable and "stealing Christmas", and vowed to protect "ordinary families" in Britain. But Lynch, the leader of Britain's RMT rail union, who was named by Sunac, said the reason for the strike was that union members felt their pay could not keep up with the current soaring inflation rate.
Why do the British people want to hold a "general strike" during the Christmas holiday?
Researchers pointed out that after the "Brexit", the United Kingdom has suffered a series of shocks such as the new crown epidemic, energy crisis, political instability, etc. Currently, inflation is serious, the economy is hard to return. Although Sunac came to power, reversing the former Prime Minister Truss's drastic tax cuts, but to transform the British economy in the short term is unlikely. The British economy is in trouble, the first to "suffer" is the bottom of the people. When they face the plight of Christmas can not afford to buy gifts, often choose to use the strike means to pressure the government.
For Sunac, who has been in office for more than 50 days, he has survived longer than his predecessor, but the strike crisis is undoubtedly posing a huge challenge to him. In this regard, Ye Jiang said, because it has not yet caused a split within the party, Sunac is not expected to so quickly "before the same mistake", the future of how to see how Sunac deal with the strike wave of this thorny issue.
It is no coincidence that the same scenario is being played out in many European countries under the heavy pressure of inflation.
Recently, the French state railroad company held a multi-day strike, Germany is also affected; Austria railroad, trade, brewers three major industries held a strike at the same time, the local media considered "unprecedented"; Belgium, Italy also appeared in the wave of railroad, air strikes... ...
On December 2, Biden signed legislation to prevent a nationwide strike by railroad workers, requiring railroad unions to enforce labor contracts mediated by the government and rejecting union demands for better labor treatment. This is the first time in 30 years that the U.S. government has intervened in such a railroad labor dispute.
Analysis believes that the economic crisis, the strike protests intensified, which will further affect the economic recovery, resulting in a vicious circle. The still-high inflation and social unrest at the end of the year also has more people preparing for a less optimistic 2023.
The Wall Street Journal recently released the results of a poll showing that most voters are pessimistic about the U.S. economic outlook for 2023, with about two-thirds of voters believing the U.S. economy is headed in the wrong direction.
However, there is still something to look forward to about the global economic situation in 2023.
"The overall environment for global economic development will improve next year and the economy is expected to stabilize and recover due to factors such as the rising willingness to cooperate globally and the inevitable rebound of the Chinese economy. However, the inflection point may not appear until 2024." Chen Fengying said.
Rachel Naegli, a nurse practitioner practicing in Texas, also said that everything could turn around in 2023. She believes that the large number of negative events and series of exposures over the past few years have sounded the alarm for people to learn from them, and "maybe we've taken off the rose-colored filter."