Last fall, Capital Economics published a very useful chart reproduced above that should adequately debunk any notion that Black Friday sales volume is a useful economic indicator.
What this says it that there’s a slightly negative correlation between Black Friday sales and total holiday sales. I wouldn’t read too much into that negative result, but the message is pretty clear. People spend what they’re going to spend on gifts during the holiday season. What happens specifically in the days immediately following Thanksgiving is probably driven by the weather, regulatory changes, etc. For example, I’m sitting in my dad’s living room right now and have no particular intention of leaving any time soon. If it were warmer, I’d probably go for a walk and check out some stores.
A related point is that Black Friday hype stories often include the factoid that consumer spending drives 70 percent of total economic output. That is true, but what the hypesters don’t tell you is that paying the dentist to fill a cavity or paying an fee to your bank to use an out-of-network ATM counts as consumer spending. Which is to say that household consumption is a very large share of the economy because household consumption is defined as being a very wide range of activities. What we think of as “consumer goods” (shirts, toasters, Playstations) is only a fraction of total consumption.
