Fourth of July statistics: Independence Day

When you ask an American about the economic impact of Independence Day celebrations, fireworks often take center stage. The Fourth of July is synonymous with stunning pyrotechnic displays, and considerable sums are expended on what amounts to a brief exhibition of colorful lights illuminating the sky. In 2016, this expenditure was estimated at $800 million, a figure that has undoubtedly surged since. While this is undoubtedly a boon for retailers catering to patriotic Americans’ appetite for explosive spectacles, it is an even more significant windfall for China’s fireworks industry, which now fulfills the majority of the demand for fireworks in the United States. Moreover, in the lead-up to each Independence Day, approximately $5.4 million worth of American flags are imported, with China being the primary source. Understandably, many Americans eagerly anticipate Independence Day aligning with a weekend, offering the promise of an extended break. Wall Street traditionally observes a partial closure on July 3rd and remains shut throughout July 4th, resulting in the Dow Jones Index and Standard & Poor’s 500 falling silent at 1 pm on Tuesday and resuming normal operations on July 5th.

While this year’s July 4th doesn’t stretch into an extended weekend, it nonetheless provides a welcome mid-week respite. Beyond the dazzling fireworks, what other expenditures prompt U.S. consumers to open their wallets during Independence Day? Beer and wine are among the initial indulgences. According to 2017 data from WalletHub, raising a glass to commemorate the nation’s birthday amounts to a $1.5 billion expenditure. However, this impressive figure pales in comparison to the $6.9 billion allocated for Fourth of July feasts, which includes $804 million on beef, $218 million on pork, $371 million on chicken, and $85 million on shrimp. The airline industry witnesses a surge in activity, with 3.8 million individuals taking to the skies to reach their July 4th destinations. The beach is a favored location, with 28% of celebrants naming it as their preferred spot to spend Independence Day. Setting aside these specific expenses, what is the broader economic impact on the U.S. economy? Economists are divided on the effects of public holidays. While granting millions of people an extra day off clearly means a reduction in productivity for that day, their increased consumption tends to offset some of this loss. A British government estimate from six years ago concerning the impact of bank holidays on the economy provided a wide range, suggesting it could be either a £1.1 billion boost or a £3.6 billion loss. Several years ago, France attempted a complex scheme to generate additional revenue for elderly care by abolishing Whit Monday as a bank holiday and imposing a special tax on the anticipated extra output that was expected on that day. This move was met with fierce public backlash, prompting the government to backtrack. One can only imagine the level of uproar that would ensue if any attempt were made to abolish the Fourth of July. Such an endeavor would undoubtedly ignite a firestorm of discontent.

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