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U.S. Holiday Spending Smashes Records, But Cash Crunch Seen Ahead

Signs are mounting that consumers are finally feeling the pinch.

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Signs are mounting that consumers are finally feeling the pinch.

The crush of endless, ceaseless shopping that has kept the nation’s economy aloft this year has proven, once again, it will not be deterred.

In the crucial five-day period between Thanksgiving and Cyber Monday this week, American consumers spent an estimated $38 billion online, according to Adobe Analytics. That topped last year’s record of $35.3 billion and soared past pre-pandemic sales of $28.5 billion in 2019.

Deep discounts of 30 percent or more on retail items and gifts prompted around 134.2 million online shoppers to spend during the long Thanksgiving weekend. Meanwhile, about 121.4 million consumers visited bricks-and-mortar shops, down from 122.7 million last year.

Following up Power Corridor’s feature on why Black Friday matters last week, these data underscore the wildly indefatigable resilience of the American consumer, who continues to splurge on gifts, toys, electronics, clothing, accessories, vacations, you name it, even in the face of higher prices, credit card debt and interest rates.

Broader metrics from Salesforce showed an even bigger surge, based on online traffic and spending data from its Commerce Cloud e-commerce service, which indicated U.S. consumers spent more than $70 billion online, up 4.1 percent from 2022, during this year’s Thanksgiving weekend. Yeah. That’s $70 billion, with a ‘B.’

Drilling down into these data, it is clear this shopping avalanche that’s powering the U.S. economy has yet to subside and may remain robust throughout the holidays. The National Retail Federation’s forecast supports that, auguring consumers will spend 5 percent more in 2023.

But in an indication that some consumers are feeling the pinch or even running out of cash, retailers found that shoppers were not only aggressively chasing down value – by going after the really big discounts – but also opting into “buy now, pay later” interest-free installment loans to cover increased spending.

Could it be a sign the Great American Shop-A-Thon is running out of gas?