Gloom to Boom: A Holiday Shopping Odyssey
American consumers sure have a funny way of expressing their gloomy mood.
For months, U.S. consumers have been telling pollsters that the economy is precarious, that they can’t afford anything, and that buying conditions are the worst they’ve ever seen. Yet this past weekend, they shattered expectations by opening their wallets, clicking online retail sites, and filling shopping malls.
The University of Michigan consumer sentiment survey for November painted a portrait of unrelenting gloom. Sentiment plunged to its lowest level since June 2022. The Current Conditions index hit a record low. Most dramatically, buying conditions for large durable goods—cars, appliances, furniture—collapsed to an all-time low in the survey’s history.
Bank of America economists noted the deterioration in views on personal finances and widespread affordability concerns. Both Democrats and Republicans reported feeling pessimistic, with lower-income consumers feeling “meaningfully worse about the economy.” The survey suggested Americans thought prices were too high, uncertainty too great, and the moment too precarious for major purchases.
So naturally, Americans went out and bought cars. Vehicle sales rebounded in November to a seasonally adjusted annual rate of 15.6 million units, up from 15.32 million in October. Sales increased 1.8 percent month-over-month. This happened in the same month when consumers supposedly believed buying conditions for large durables had never been worse. Auto sales are still down from a year ago but this rebound is hardly consistent with the idea of a downbeat household sector.
Money Talks Louder Than Surveys
The Thanksgiving weekend shopping data tells the same story of consumers defying their own stated pessimism. A record 203 million shoppers turned out over the five-day period from Thanksgiving through Cyber Monday, according to the National Retail Federation. That’s up from 197 million last year and topped the previous record of 200.4 million set in 2023. It also exceeded NRF’s own expectations by roughly 16 million shoppers.
These weren’t window shoppers. Nearly all—96 percent—made holiday-related purchases, spending an average of $337.86, up from $315.56 last year and the highest figure since 2019’s record. Approximately two-thirds of that went toward gifts.
Elevated view of young woman making online payment via laptop while unboxing package from delivery. Online shopping and home delivery.
Both in-store and online shopping increased. Physical stores drew 129.5 million shoppers, up three percent from last year. Online attracted 134.9 million, up nine percent. Black Friday remained the top shopping day, drawing 80.3 million in-store and 85.7 million online. But the real surge came on the days consumers supposedly aren’t supposed to shop. Saturday drew 62.7 million in-store shoppers and 63 million online. Sunday after Thanksgiving saw in-store traffic jump 27 percent to a record 32.6 million shoppers.
Cyber Monday pulled 75.9 million online shoppers, up from 64.4 million last year, with mobile devices leading the charge—46.9 million consumers shopped via mobile, up from 40.4 million in 2024.
Consumers bought clothing and accessories (51 percent of shoppers), toys (32 percent), books and media (28 percent), and gift cards (26 percent). Importantly, these are discretionary purchases and not households desperately stocking up on staples ahead of an expected bout of inflation.
By the end of Thanksgiving weekend, 84 percent of consumers had begun their holiday shopping, though they still had about half their shopping left to do. The National Retail Federation forecasts holiday spending will top $1 trillion for the first time, with growth between 3.7 and 4.2 percent over 2024.
The pattern here isn’t new, but it remains underappreciated. Consumer sentiment surveys have become increasingly disconnected from consumer behavior. What people say about the economy and what they do with their money tell two different stories.
Several factors drive this gap. Sentiment surveys capture emotional responses heavily influenced by media narratives, political polarization, and abstract concerns about “the economy” writ large. Spending decisions reflect personal circumstances.
This doesn’t mean the economy is perfect or that legitimate affordability concerns don’t exist. But it does suggest that consumer sentiment surveys have become poor predictors of actual consumer behavior. Americans might tell pollsters they’re worried about high prices and bad buying conditions, but they’re still buying.
The disconnect matters because policymakers, investors, and analysts often treat sentiment surveys as leading indicators of spending. If consumers feel pessimistic, the conventional wisdom goes, they’ll soon tighten their belts. Except they haven’t. They keep spending while complaining about the economy, breaking shopping records while claiming buying conditions are terrible.
