U.S. Black Friday sales rose 4.1% year-on-year, AI traffic surged by 600%, while inflation and the "K-shaped economy" remain ongoing themes.

American consumers showed more resilience this year on “Black Friday” than the market expected, resulting in steady growth in overall retail sales. However, behind these eye-catching figures lies weak actual purchasing power growth under high inflation and an increasingly severe economic divide. Although spending overall rose, the consumption behavior of wealthy classes and low-income groups showed a marked “K-shaped” divergence, with inflation anxiety and price sensitivity becoming core variables dominating market sentiment.

According to the latest statistics released by SpendingPulse, which provides data for Mastercard, U.S. retail sales (excluding automobiles) on “Black Friday” rose 4.1% year-on-year, outpacing last year’s 3.4% growth.

Meanwhile, data from Adobe Analytics revealed a brand new trend: Generative AI played a key role for the first time during the holiday shopping season, with AI-related traffic to U.S. e-commerce sites surging 600% year-on-year.

This data series delivers important signals to executives, economists, and investors closely monitoring the holiday shopping season. On the one hand, data shows that despite facing high borrowing costs and uncertainty in the job market, American consumers haven’t stopped spending. On the other hand, market analysis points out that much of the growth in sales was driven by price hikes rather than an increase in sales volume. After factoring in inflation, the actual growth of spending may be very limited, highlighting that consumers have become more savvy and cautious in their purchasing decisions.

As the holiday shopping season deepens, the market’s attention is turning to how long consumers can sustain this level of spending.

The current consumption pattern not only reflects the macroeconomic volatility but also underscores deep structural contradictions within the U.S. economy: wealthy asset holders continue to spend freely, while ordinary households reliant on wages are forced to respond to the cost-of-living crisis with stricter budget management.

AI Empowering E-Commerce and Online Sales Boom

This year marks the debut of generative AI in directly influencing consumer shopping decisions.

According to Adobe Analytics, with the rollout of agent-enabled browsing and shopping tools by companies like OpenAI and Perplexity, consumers are increasingly relying on AI technology for product research and price comparison. In addition to a 600% surge in AI traffic, about 48% of respondents plan to use AI to assist with online shopping this season.

Online channels have become the main engine driving growth this year. Adobe data shows shoppers spent $11.8 billion online, up 9.1% year-on-year.

Mastercard’s data, though using slightly different metrics, also shows online sales grew by 10.4%, far exceeding the 1.7% growth in in-store sales. E-commerce software provider Shopify revealed that as of Friday evening, its merchants were recording nearly $2.8 million in sales per minute on its platform. Vivek Pandya, Principal Analyst at Adobe Analytics, noted that retailers ramped up discounts over Thanksgiving, successfully spurring a surge in online demand.

K-Shaped Economic Divide

Despite the overall positive figures, detailed data show a clear “K-shaped” trend in the U.S. economy. CNN cited the Fed’s latest “Beige Book” noting that spending by low- and middle-income consumers is declining, while high-income groups with stocks and homeowners continue splurging on luxury and travel.

Consumer expert Claudia Lombana told CNN: “High-income earners can spend at will, while those who are less affluent need to be very careful.”

Rick Newman, writer of the “The Pinpoint Press” economic brief, analyzed that accounting for the current 3% inflation rate, the 4.1% nominal growth in spending may mean actual growth is only about 1%. He pointed out, for low-income groups without stock or property, rising rent outpacing income growth, high heating and food costs are forcing them to be more frugal when buying gifts and necessities.

The Shadow of Inflation and Trump Tariff Expectations

Price remains the decisive factor influencing consumer choices. According to data from the National Retail Federation (NRF), 85% of consumers expect further price increases due to the tariff policies of President-elect Donald Trump. Newman points out that while consumers may not calculate individual tariff costs, this has become a psychological burden when shopping.

Against this backdrop, value-oriented retailers have become the winners. Chains such as Walmart, TJ Maxx, and Gap benefited by helping shoppers “make every dollar go further,” reporting robust sales.

Walmart even said its market share increased among all income groups. In contrast, Target Corp. and Bath & Body Works faced challenges. Target reported that at opening, only about 150 shoppers lined up for free giveaways, indicating subdued foot traffic.

Credit Pressure and Outlook

To ease cash flow pressure, “Buy Now, Pay Later” usage increased significantly. Adobe expects the transaction volume using this payment option will reach $20.2 billion from November 1 to December 31, up 11% year-on-year, indicating tightening cash flow for some consumers.

Despite cost-of-living pressures, Michelle Meyer, Chief Economist at Mastercard Economics Institute, emphasized in an interview: “This clearly shows that consumers still have spending power.” The market is now looking forward to the upcoming “Cyber Monday,” with Adobe forecasting it will be the largest online shopping day of the year, with sales potentially reaching $14.2 billion, up 6.3% year-on-year.

NRF expects that retail sales for November and December will grow 3.7% to 4.2% year-on-year. While this may be a record $1 trillion holiday season, the driving force will be more price increases than explosive demand.

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