Black Friday & Cyber Monday: Important Drivers Of Economy & Investing
December 9, 2024
By Maximilian Sickenberger
Intern
How did it all start?
Every year, the day after Thanksgiving transforms into a frenzy of deals, discounts, and shopping sprees, but have you ever wondered how Black Friday became such a global phenomenon? Originating in the United States during the 1960s, the term initially referred to the chaotic traffic jams caused by post-Thanksgiving shoppers. Over time, it evolved into the biggest retail event of the year with retailers slashing prices to kick off the holiday shopping season. Today, Black Friday and its digital counterpart, Cyber Monday, have grown into a multi-billion-dollar affair that not only shapes consumer behavior, but also sends ripples through global markets and investment strategies.
Black Friday and Cyber Monday spending in the U.S. has consistently shown robust growth, reflecting changes in consumer behavior and economic trends. In 2024, 197 million shoppers participated over the Thanksgiving weekend, slightly fewer than the record 200 million in 2023, but spending per person increased, with online sales jumping 15% and overall sales rising by 3.4%. Early promotions have shifted some focus away from Black Friday itself, while inflation made consumers more selective, prioritizing value and deals across both physical and online stores.
https://www.statista.com/chart/33579/expected-average-per-consumer-spend-for-the-period-between-thanksgiving-thursday-and-cyber-monday/
Consumer Spending and GDP
Black Friday and Cyber Monday are critical drivers of consumer spending, which constitutes roughly two-thirds of GDP in many economies, including the United States. These events signal the start of the holiday shopping season, a period that often represents the largest spike in retail sales for the year. Elevated consumer spending during these days generates significant economic activity, impacting industries from retail and logistics to technology. The 15% increase in online sales in 2024 mentioned earlier, for instance, underscores the growing importance of e-commerce in fueling economic growth. As consumers allocate a substantial portion of their budgets during these shopping events, they play a vital role in sustaining businesses and boosting quarterly GDP figures.
How Black Friday Plays a Role in Stock Investments
Black Friday is particularly intriguing for investors as it offers a real-time gauge of consumer sentiment and retail performance, often influencing the stock prices of major companies. For retail giants like Apple, Amazon, and Walmart, strong sales can signal robust quarterly earnings, potentially driving stock prices up. Investors closely monitor these companies' performance during Black Friday, as it can serve as a predictor of future demand, especially in the tech and consumer goods sectors.
With the Holiday Season upon us, we are grateful you have entrusted us with the opportunity to help you achieve your financial goals. If you would like to discuss any budgeting, year-end planning, or charitable giving, please reach out to your Financial Advisor. Your financial success matters.