Black Friday shopping takeaways and what they mean for the economy

Black Friday sales are expected to test shoppers, who account for nearly three-quarters of U.S. economic activity, as the nation enters the holiday shopping season.

According to Adobe Analytics, consumers spent $9.8 billion online on Black Friday, representing a 7.5% increase over the previous year.

Shopper visits, a metric used to gauge sales per capita, rose 4.6% from a year ago — nearly double the average overall increase in foot traffic so far this year, according to retail data firm Sensormatic Solutions.

Additionally, consumers are expected to spend between $12 billion and $12.4 billion on Cyber ​​Monday, making it the largest online shopping day on record, according to Adobe Analytics.

A significant drop in inflation over the past year has given some relief to consumers. At the same time, they have been squeezed by the collapse of savings built up during the pandemic and the rise in borrowing costs for loans such as credit cards and mortgages.

„The Christmas shopping season is off to a good start as Black Friday sales appear to be strong,” Mark Jandy, chief economist at Moody’s Analytics, told ABC News. „Consumers are hanging tough.”

As the holiday season takes hold, several key indicators are boding well for consumers. The unemployment rate is at a 50-year low, wage growth is outpacing inflation and savings are resilient for high- and middle-income families, Jandi said.

The U.S. economy grew at an annualized pace of 4.9% in the three months ended September, doubling growth in the previous quarter and rebuking concerns about a possible recession, a government report showed last month.

Black Friday sales data suggest that good times for consumers may continue throughout the year, Jandy said.

„While Black Friday isn’t always a good guide to overall Christmas sales, it’s a good sign,” he noted.

However, potential risks remain for consumers, too, the U.S. economy, Simeon Siegel, retail analyst at BMO Financial Group, told ABC News.

Credit card debt hit a record high in the third quarter of 2023, up nearly 5% from the previous quarter, and a growing share of borrowers are late on payments, a Federal Reserve report showed earlier this month.

The growing debt has been exposed to rising borrowing costs for everything from credit cards to mortgages, fueled by interest rate hikes by the Federal Reserve.

Since last year, the central bank has raised its key interest rate at its fastest rate in more than two decades, seeking to curb inflation by slowing the economy and reducing consumer demand.

In theory, the economy should eventually falter as it becomes more expensive for businesses and consumers to borrow money. For example, the job market remains strong but has slowed in recent months.

Broad economic trends provide ample „reason for concern,” Siegel said. He noted, however, that Black Friday sales seemed to dispel fears of a worst-case scenario for consumers.

„The question is, 'Will it be so big that it closes the cash registers and prevents them from going online and into stores?'” Siegel said. „The response from retailers would suggest it is not.”

Rosy inferences from the data should be treated with caution, Siegel said. Consumers often spend during the holidays, even if it means shopping beyond their means, Siegel added, calling Black Friday sales an imperfect shorthand for consumer health.

„The holidays are off to a good start,” Siegel said. „What you and I can see from income is what people have spent. But we can’t see what they have in their bank accounts.”

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