SHARP DROP IN AIRFARES A RELIEF TO FRUSTRATED TRAVELERS

Average price for flights around Thanksgiving down from a year ago

Airfares to many popular destinations have recently fallen to their lowest levels in months, and even holiday travel is far cheaper than it was last year, providing some welcome relief to consumers who have been frustrated for months by high prices for all manner of goods and services.

The glut of deals suggests that the airline industry’s supercharged pandemic recovery may finally be slowing as the supply of tickets catches up and, on some routes, overtakes demand, which appears relatively robust.

Consider the fares that Denise Diorio, a retired teacher in Tampa, Fla., recently scored. She spent less than $40 on flights to and from Chicago and paid just $230 for a round-trip ticket from New York to Paris and back, a trip she plans to take this month.

“I’ve been telling all my friends, ‘If you want to go somewhere, get your tickets now,’ ” she said.

The bargains she found may be exceptional, but Diorio is right that deals abound.

Early this month, the average price for a domestic flight around Thanksgiving was down about 9 percent from a year ago. And flights around Christmas were about 18 percent cheaper, according to Hopper, a booking and pricetracking app. Kayak, the travel search engine, looked at a wider range of dates around the holidays and found that domestic flight prices were down about 18 percent around Thanksgiving and 23 percent around Christmas.

“In a lot of cases, we’re seeing some of the lowest fares that we’ve seen really since travel started coming back after the drop-off in 2020,” said Kyle Potter, executive editor of Thrifty Traveler, a travel blog and deal-watching service.

companies to raise prices in the coming months.

Adams, echoing other economists, said he thinks the Fed’s most likely next move will be to cut rates, likely by mid-2024.

The prospect that the Fed may end its rate hike campaign and eventually cut rates fueled a stock market rally Tuesday. The Dow Jones industrial average rose nearly 1.5 percent in mid-morning trading. The yield on the benchmark 10-year Treasury note fell to 4.44 percent, down from nearly 4.6 percent, reflecting investors’ expectations that borrowing rates will move lower.

The Fed’s rate hikes have increased

the costs of mortgages, auto loans, credit cards and many forms of business borrowing, part of a concerted drive to slow growth and cool inflation pressures. The central bank is trying to achieve a “soft landing” — raising borrowing costs just enough to curb inflation without tipping the economy into a deep recession.

“Things are proceeding in a way that is very consistent with what (the Fed) would want to see,” said Eric Winograd, chief economist at AB Global, an asset management firm. “They look like they are on course to generate a soft landing. There’s no guarantee that they will actually manage to accomplish it. But right now, that’s the story that the data are telling.”

Prices first accelerated in 2021

as consumers stepped up spending amid a fading pandemic. Much greater demand ran headlong into snarled supply chains, which led retailers and other companies to quickly jack up prices. Inflation has since eased as supply chains have improved and higher borrowing rates have weakened some industries, notably housing.

Improved supply chains have helped reduce the prices of new and used vehicles, with used-car prices falling for five straight months. New car prices fell 0.1 percent in October despite worries among many economists that the now-settled autoworkers’ strike would reduce dealer inventories and force up prices.

The costs of apartment rents and overall housing also slowed in

October after an uptick in September. Rents rose just 0.3 percent from September to October, half the pace of the previous month. Compared with a year ago, rents are still up 6.7 percent, a sizable increase that has made housing less affordable. Even with the smaller increase, rental and housing costs accounted for twothirds of the increase in core inflation compared with a year ago.

Many economists say a key reason why most Americans hold a gloomy view of the economy despite very low unemployment and steady hiring is that the costs of things they buy regularly — gas, meat, bread and other groceries — remain much higher than they were three years ago.