The hidden costs of record sales

Stuffing wasn’t the only thing Americans overdid this Thanksgiving.

Holiday weekend spending smashed forecasts: shoppers spent $6.4 billion on Thanksgiving, $11.8 billion on Black Friday, and $14.25 billion on Cyber Monday—all record highs. At peak hours, $12.5 million flowed through online carts every minute.

Tech played a surprisingly large role this year: AI-driven traffic to US retail sites jumped 805% on Black Friday compared to last year, helping steer shoppers toward deals and boosting conversion. Total online sales hit $44.2 billion per Adobe Analytics, beating expectations.

Behind the boom

At first glance the numbers look strong, but a closer look tells a different story: Americans are spending more but walking away with less.

Revenue from online Black Friday sales rose 3%, but only because the average selling price jumped 7%, according to Salesforce. It might have seemed like everything was on sale, but average Cyber Week prices actually rose 7%, outpacing last year’s 5% climb. And Americans bought less overall on Black Friday, with shopping carts 2% smaller than they were a year earlier.

One major culprit is tariffs: The rising price of imported goods has pushed producers to pass along higher costs to customers stateside. Typically, the US leads global holiday spending growth—but this year, global Black Friday spending grew twice as fast as US sales. And Cyber Monday sales growth in the US lagged behind Europe for the first time, a reversal fueled by US tariffs and aggressive ECB rate cuts, according to Bloomberg.

What this means for the economy

All this plays out as consumers confront mounting economic anxiety. Alongside tariff-driven costs, households are facing job insecurity and stubborn inflation. Consumer spending makes up 70% of US GDP, but the foundation of the US economy is wobbling, as illustrated by the Consumer Confidence Index recently falling to its lowest level since April.

The holiday sales strength we’re seeing today may reflect a divergence between haves and have-nots, rather than broad consumer health. Heather Long, chief economist at Navy Federal Credit Union, called this season “a K-shaped economy on steroids,” with Americans earning more than $170,000 driving double-digit spending growth this year.

The question now is whether this small base of big spenders can sustain momentum through the rest of the season, and into next year.—SY