Black Friday spending was up. Maybe. And if it is, it’s because the wealthy are having a gay old time while everyone else is struggling:
US retail sales on Black Friday, the busiest shopping day of the year, climbed 4.1% compared with last year, according to data released Saturday by Mastercard SpendingPulse. Online shoppers alone spent $11.8 billion, up 9.1% from 2024, according to data collection platform Adobe Analytics.
But those gains don’t account for higher prices due to inflation, so actual spending could be flat. “We have 3% inflation, so maybe (the 4.1% increase in spending) is a real increase of just 1% or so, which is not that much of an increase,” Rick Newman, who writes The Pinpoint Press, a newsletter on the US economy, told CNN on Friday.
There’s also a bifurcation in who’s spending. The Federal Reserve’s most recent Beige Book, a collection of anecdotes about the economy, showed consumer spending among low- and middle-income consumers is on the decline. Meanwhile, the Fed found high-end consumers are continuing to spend — including on luxury items and travel.
Consumers have bought fewer items this holiday season, but the average selling prices are higher, according to Claudia Lombana, a national consumer expert. “The ones that have higher income are spending at will, but those who are less affluent are budgeting,” Lombana told CNN’s Omar Jimenez on Saturday.
It’s part of the so-called K-shaped economy, in which higher earners get a boost from their stock market investments and home valuations and use their fatter paychecks to spend. But lower earners increasingly live paycheck to paycheck and look for discounts — or curtail their spending to cope with rising prices.
Wealthier people don’t have any problem with these higher prices, natch. It’s all fun and games for them. Everyone else, not so much. Is this sustainable? Unlikely, since the political blow back from the have nots tends to get very intense.
Income inequality is nothing new, of course. But it’s gotten much worse over just the last few years and with Trump at the helm hosting lavish celebrations with his billionaire buddies, the public will get less and less tolerant of this “let them eat cake” bs. He promises bread and circuses and he’s certainly delivering on the latter. But the bread comes first and he’s certainly not delivering on that.