Inflationary pressures may dampen US consumers' enthusiasm for annual 'Black Friday' spree
As Black Friday approaches, the Conference Board reports that Americans are "ready to open their wallets this holiday season." Traditionally, Black Friday marks the start of the Christmas shopping season in the US, characterized by significant discounts.
This year, shoppers are eager to participate in the holiday festivities, but their enthusiasm is tempered by ongoing concerns about inflation, which, while easing, remains a factor. Many consumers are frustrated by persistently high prices, even though they have stabilized after the rapid increases seen during the pandemic.
Morgan Stanley's recent survey indicates that while 35% of consumers plan to increase their holiday budgets compared to last year, nearly two-thirds of shoppers will forgo purchases if discounts do not exceed 20%. Analyst Neil Saunders from GlobalData noted that although the season looks promising, growth may not be as robust due to continued consumer financial pressures.
Inflation remains above the Federal Reserve's long-term target of 2%, with October's rate rising to 2.6% annually, up from 2.4% in September.
Consumers still perceive financial challenges, leading to cautious spending behavior. This year's Black Friday falls on Nov. 29, the latest possible date, shortening the time between Thanksgiving and Christmas. However, some experts caution against overestimating the impact of this timing, as many retailers have begun holiday promotions earlier than ever, with some starting their "Black Friday" sales as early as October.
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