Black Friday, Cyber Monday – Sales Up, Trouble Ahead?

<p>As the Black Friday and Cyber Monday whirlwind fades, analysts
scrutinize the seemingly extravagant spending frenzy. However, diving into the
numbers reveals a subtler economic tale, where inflation fatigue, "trading
down," and a complex consumer mindset defy simplistic interpretations.</p><p>A Retail Bonanza</p><p>The Black Friday and Cyber Monday shopping extravaganza has become a
ritualistic dance of commerce, and even <a href="https://www.financemagnates.com/thought-leadership/squaredfinancial-unveils-an-unmatched-black-friday-promotion-a-game-changer-for-traders/">trading
firms get on board</a>, but it may be a misguided economic litmus test. While
record-breaking online sales and peak-hour spending paint a rosy picture, the
true narrative lies in the nuances of how consumers navigate a marketplace
fraught with inflation and shifting spending patterns.</p><blockquote><p lang="en" dir="ltr">Black Friday online sales reach record level, according to Adobe Analytics<a href="https://t.co/faYJCzelgS">https://t.co/faYJCzelgS</a></p>— FOX Business (@FoxBusiness) <a href="https://twitter.com/FoxBusiness/status/1729503382514118834?ref_src=twsrc%5Etfw">November 28, 2023</a></blockquote><p>Amidst the holiday shopping spectacle, experts warn against over-interpreting
Black Friday and Cyber Monday spending sprees as accurate reflections of the
broader economic landscape. The headlines tout astronomical figures – <a href="https://news.adobe.com/news/news-details/2023/Media-Alert-Adobe-Cyber-Monday-Surges-to-12.4-Billion-in-Online-Spending-Breaking-E-Commerce-Record/default.aspx">Adobe
Analytics reports</a> a staggering $12.4 billion spent on Cyber Monday, a 9.6%
increase from the previous year. </p><p>According to Adobe, “Cyber Week (the five days from Thanksgiving to
Cyber Monday) brought $38 billion overall, up 7.8% YoY. It was
bolstered by record spending online during Thanksgiving ($5.6 billion, up 5.5%
YoY), Black Friday ($9.8 billion, up 7.5% YoY) and over the weekend ($10.3
billion, up 7.7% YoY).” So those numbers include both Cyber Monday and Black
Friday. Yet, beneath the surface, a more complex narrative unfolds.</p><p>Post-Holiday Blues</p><p>As the economy grapples with inflation fatigue, consumers seem to be
adopting a strategy of "trading down," opting for cheaper
alternatives. This year, sales growth for the holidays in the US is forecast to
slow to 3.3% from 6% last year. That’s below the pre-pandemic average of 3.9%
and well below rates seen in recent years, according to analysis from <a href="https://www.spglobal.com/marketintelligence/en/mi/research-analysis/us-holiday-sales-outlook-2023.html">S&amp;P
Global Market Intelligence</a>.</p><p>The mixed signals leave economists cautious about drawing definitive
conclusions regarding the overall economic health. The holiday season's
spending spree, although a significant economic data point, doesn't paint the
entire picture. In general terms, analysts agree that it sets the tone for
growth in the coming year, but caution against overreliance on this singular
indicator.</p><p>Cyber Week – Not a Crystal Ball</p><p>As 2024 approaches, the consensus among experts is that holiday
spending data alone isn't a crystal ball for the US economy. While some foresee
a potential retrenchment in economic growth for the fourth quarter of this
year, the broader outlook remains dependent on various factors. Unemployment
rates, interest rates, and consumer resilience all play pivotal roles in shaping
the economic landscape, making predictions about a recession in 2024 a nuanced
exercise. </p>

This article was written by Louis Parks at www.financemagnates.com.