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I was walking with my good friend Brook on Thanksgiving morning, and we were talking about whether the current economic climate would lead to lower sales on Black Friday, the next day. We both arrived at the same guess, considering the downturn in the economy, Black Friday sales would probably be lower by at least 10% from last year. We were pretty confident.
Boy, were we surprised the following Monday when Black Friday sales were reported to be nearly 5% higher than 2024. The most significant increase was in online sales, skyrocketing this year, hitting nearly $12 billion, up over 9% from $10.8 billion in 2024 on Black Friday alone.
At first, it was easy to speculate that American consumers were acting irresponsibly and spending beyond their means. However, after a little digging, I realized that might not be the case at all.
American Consumerism has definitely changed, and the current sales stats bear that out. One very notable change is that AI-driven traffic to retail sales soared 805% over last year! Technology has changed the dynamics of shopping, and it’s growing exponentially.
Many articles point to more efficient spending with the increased usage of AI for deal-finding and cautious consumers spending more strategically, which could also explain why Black Friday surged over last year as well. They bought more, but at bargain prices.
And contributing to the fuzziness of the stats is the influence of the K-shaped economy. In a nutshell, the wealthiest (top of the K) are doing fine, spending has continued and in fact increased on luxury items and travel, but the low and middle income (bottom of the K) are on the decline, as they are worried about job security as well as not seeing investment gains like those on the top of the K.
The K-shaped economy is a thing. In today’s economy, the higher income earners are seeing increased wealth through their stock investment gains, higher real estate values, and generally larger paychecks. By contrast, the lower income earners have less investments and are understandably concerned with the increases in health insurance, heating bills, groceries – all the basics.
And then there’s the topic of household debt reaching all-time highs. In particular, credit card debt increased $24 billion in the 3rd quarter of 2025, now totaling $1.23 trillion, a 5.5% increase over last year at this time. And this isn’t even including this Christmas season spending.
Trends are pointing to a squeeze for average to below average income earners, while those at the top are in good shape, assuming stock markets continue to rise, or at least don’t drop significantly.
I’m really curious about what Brook and I will talk about next Thanksgiving’s morning walk. I am hopeful that we’ll see some positive turnarounds in our economy and that we’ll get a handle on the downturn we are experiencing.
Here’s to a happy and (hopefully) prosperous 2026!