Here's what the shopping weekend tells us about the state of the economy
JUANA SUMMERS, HOST:
Americans say they worry about the economy, but they are really shopping. The busiest retail weekend of the year ends today, and that is paving the way for a record holiday season. What does this all tell us about the state of the American shopper? NPR's Alina Selyukh is here in studio to explain. Hi.
ALINA SELYUKH, BYLINE: Hello, hello.
SUMMERS: All right, Alina, what did we learn about the state of the economy over Black Friday and today on Cyber Monday?
SELYUKH: Well, let me tell you about a little microcosm that I personally witnessed. I went to two outlet malls in eastern Maryland on Black Friday, and I waited more than 20 minutes just to park.
SELYUKH: There were roadblocks diverting traffic. There were people walking for, like, a mile on foot with their shopping bags to get to their cars. It was mayhem at Old Navy.
SUMMERS: This sounds wild. It does not sound particularly fun. Go on.
SELYUKH: So to summarize, Americans might say they're really anxious, but they are splurging for the holidays. We have been seeing this for over a year now. People will say they are concerned about the economy broadly, but then they're still going on trips and going out to eat individually. And we are spending more on holiday gifts. We don't have all the data for the long weekend yet, but we know Black Friday has already set a record on top of last year's record. Just online, people spent $9.8 billion on Black Friday, which is more than last holiday. And that's according to Adobe Analytics. It's a firm that tracks online transactions. And the firm is forecasting another 10 billion in spending for Cyber Monday - also more than last year. Add in all the offline spending, and we are on track for a record holiday season again.
SUMMERS: OK. So how well then are people's budgets prepared for all of the spending that we seem to be doing?
SELYUKH: Yeah, people are definitely price-conscious. I actually think that's part of the reason why Black Friday and Cyber Monday are so big this year. People are hunting for bargains. And so a lot of folks, I think, waited for these big discounts. And these are best prices of the year. We're also swiping credit cards more. We paid them off during pandemic lockdowns. Then we started charging them again. And now more people are falling behind on their credit card bills, though economists do say credit card debt is still pretty low by historic standards.
SUMMERS: Right. And, I mean, I'm thinking here, many folks, like me, are once again facing those student loan payments that started back up. And with inflation, prices for everything are higher. How does that all add up to us getting a record shopping season?
SELYUKH: Yes. Well, to note, some prices are coming down. But overall, economists will point to one really powerful thing, and that is people have jobs. Here's what I heard from Michelle Meyer, who is the chief economist for North America at the Mastercard Economics Institute.
MICHELLE MEYER: What's happening in the labor market - absolutely the No. 1 dynamic. Because if people are employed and they believe they'll continue to have their job, they'll have income creation, that's the biggest driver for spending.
SELYUKH: So unemployment has been near record lows. People might feel anxious, but companies are hiring and wages have been growing. And that's big. As a nation, we are getting paid more. And Meyer says our raises are actually outpacing price increases, which is something new this holiday season compared to last.
SUMMERS: OK, Alina, so is the takeaway here that we all say we're worried but we're actually secret optimists?
SELYUKH: I think old habits die hard is another one. The word that's been coming up talking with economists is a reset. Like, we're resetting to a version of an even keel after the wild swings of the pandemic economy and, you know, sitting in traffic jams and parking lots in front of stores.
SUMMERS: Indeed. NPR's Alina Selyukh, thank you.
SELYUKH: Thank you. Transcript provided by NPR, Copyright NPR.
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