Americans Spend Big on Black Friday Amid Economic Challenges
Record Holiday Sales Despite Economic Gloom
While many Americans express concern about their economic prospects, shopping activity on Black Friday indicated a strong consumer response, setting new spending records. According to Adobe Analytics, online shoppers spent a remarkable $11.8 billion on November 28, marking a 9.1% increase from the previous year. When considering in-store sales, the overall spending on Black Friday saw an increase of 4.1% compared to last year, as reported by Mastercard SpendingPulse.
Looking ahead, Cyber Monday is also expected to yield significant spending, with forecasts from Adobe predicting a record $14.2 billion in online sales-a more than 6% increase from last year.
Inflation Continues to Impact Consumer Behavior
Although holiday spending numbers are robust, there are underlying signs of economic strain. Data from Salesforce.com indicates that discounts this year have not been as generous, with the average selling prstart of goods increasing by 7% from last year, while consumers are purchasing 2% fewer items at checkout. Neil Saunders, an analyst at GlobalData, noted, “A lot of growth is being driven by higher prstarts, and this means the growth in the number of things that people buy is significantly less.”
Inflation data reveals a rate of 3% as of September, up from a low of 2.3% in April, contributing to consumers feeling that their dollars are not stretching as far.
The Affordability Crunch on Households
The vital role of consumer spending in the U.S. economy-accounting for about 70 cents of every dollar of gross domestic product-has raised questions regarding the outlook for the holiday season, especially as consumer confidence hit its lowest point since April. Rising costs, from groceries to utilities, have put pressure on household budgets. According to Deloitte’s 2025 holiday study, three-quarters of shoppers anticipate higher prstarts during this holiday season.
Consumer trends indicate that high-income households are primarily driving spending, with the top 10% responsible for nearly half of all expenditures in the second quarter, as outlined by Mark Zandi, chief economist at Moody’s Analytics. In contrast, spending among the bottom 80% of households (those earning less than $175,000 annually) has merely kept pace with inflation since the pandemic, creating a so-called “K-shaped economy.”
Kent Smetters from the Penn Wharton Budget Model described the current consumer landscape as bifurcated, with wealthier households remaining active online while lower-income households are more selective and cost-conscious in their purchases.
Diverse Retail Performance in the Current Landscape
Despite the overall trends, both discount retailers and luxury brands have reported strong performance this holiday season. Saunders highlighted that value-focused retailers, such as Walmart, are faring well alongside accessible luxury brands like Coach and Ralph Lauren. However, the low-volume growth indicates that while some are prospering, others are struggling.
As the holiday season progresses, the dynamics of consumer spending reveal a complex economic picture, balancing record sales against the backdrop of inflation and changing consumer behaviors.