Black Friday sales have kicked off in the United States, but consumer confidence is low, and tariffs are high.
Following the recent record-breaking government shutdown, American consumer confidence is at its lowest point in months, since President Donald Trump first announced his broad suite of tariffs back in April.
The research from The Conference Board, released this week, found that for the month of November, consumer confidence “fell sharply” and that spending plans for big-ticket items over the next six months declined as well, despite Black Friday sales typically serving as a key time for these larger purchases.
Tariffs are also still impacting businesses looking to trade this sale season, with shipments of some holiday merchandise being organised early to try and avoid the full tariff effect, but some expenses have inevitably been passed on to consumers.
However, analysts remain optimistic overall, with the largest retail trade group in the U.S. forecasting an increase in sales spending.
The National Retail Federation is estimating an increase of 3.7-4.2% compared to last year, to the tune of just over US$1 trillion, which would be a new record.
"The economy has continued to show surprising resilience in a year marked by trade uncertainty and persistent inflation. As tariffs have induced an uptick in consumer prices, retailers have tried to hold the line on prices given the uncertainty about trade policies,” said NRF President and CEO Matthew Shay.
“American consumers may be cautious in sentiment, yet remain fundamentally strong and continue to drive U.S. economic activity.”
