How inflation affects the cost of Valentine’s Day celebrations


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Holidays remain

How inflation affects the cost of Valentine’s Day celebrations

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With prices at all-time highs, Valentine’s Day may cost you extra this year. But if you’re after a romantic evening, the bill may not be as bad as you might think.

Despite inflation at multi-decade highs, the holiday is still “relatively affordable” compared to inflation in the wider economy, according to LPL Financial. The company’s Valentine’s Day Index, which tracks annual prices for four celebrations — jewelry, night out, outings and vacations — was 7%, close to 7.5% consumer price index (CPI) inflation.

But beneath the surface, some components of the index are much cheaper and may be better options this year to avoid bankruptcy. The cost of staying overnight (home-cooked meals, wine, flowers and sweets) and going out (restaurant dinners, babysitting and theatre tickets) rose 4.0% and 4.7%, respectively, below the broader index of inflation levels.

“Thankfully, inflation hasn’t hit the economy as hard as it has on Valentine’s Day,” Ryan Detrick, chief market strategist at LPL, said in a note.

Holidays remain

Despite inflation at multi-decade highs, the holiday is still “relatively affordable” compared to inflation in the wider economy, according to LPL Financial.

While the prices of sweets, home-cooked meals and flowers were largely in line with general inflation, the price of a glass of wine barely rose. LPL Financial emphasizes that the U.S. Bureau of Labor Statistics does specifically track the price of wine consumed by households.

However, menu items in the one-night home-cooked portion may be a bit higher, but meat, poultry, fish and eggs are up about 12% in 2021. Fruit and vegetables rose 5% last year, while desserts saw a slightly lower 2% increase.

A heart-shaped decoration and a couple sitting at a table are seen in a restaurant on February 13, 2022, the day before Valentine's Day in Krakow, Poland.  (Photo by Jakub Porzycki/NurPhoto via Getty Images)

Valentine’s Day: A heart-shaped decoration and a couple sitting at a table are seen in a restaurant in Krakow, Poland, on February 13, 2022. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

Celebrating with the holidays may not be the most cost-effective way to tell your significant other that you love them this year. The LPL said in its data that the component’s annualized growth rate of 11.9% was significantly higher than the broader inflation index. Meanwhile, LPL’s data reflects a combined increase in jewellery prices in 2020 and 2021, with an annualised growth rate of 4.1%.

the story continues

Detrick noted that while some components of Valentine’s Day are still below headline inflation, each component is still at 10-year highs. The Labor Department’s consumer price index (CPI) rose 7.5% in the year to January, beating expectations and the largest annual increase since 1982.

In addition, the CPI unexpectedly rose 0.6% month-on-month, while economists had expected the data to slow down.

According to its annual survey, the National Retail Federation estimates that Valentine’s Day spending is expected to hit $23.9 billion this year, up from $21.8 billion in 2021 and the second-highest year on record.

Based on these metrics, that money could be far less in the face of rising inflation.

“Overall, Valentine’s Day is the best holiday, because time together really matters,” Detrick said. “Inflation can’t touch that.”

Alexandra Semenova is a reporter for Yahoo Finance.Follow her on Twitter @alexandraandnyc

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