Analysis:Strong start to online holiday shopping masks signs of a fragile US consumer
FILE PHOTO: A holiday sale sign is displayed in a window at an outlet mall in Carlsbad, California, U.S., November 25, 2025. REUTERS/Mike Blake/File Photo Workers organize products during Cyber Monday at the Amazon's fulfillment center in Robbinsville, New Jersey, U.S., December 1, 2025. REUTERS/Eduardo Munoz Workers organize products during Cyber Monday at Amazon's fulfillment center in Robbinsville, New Jersey, U.S., December 1, 2025. REUTERS/Eduardo Munoz 03 Dec 2025 03:40AM (Updated: 03 Dec 2025 10:21AM) Bookmark Bookmark Share WhatsApp Telegram Facebook Twitter Email LinkedIn Read a summary of this article on FAST. Get bite-sized news via a newcards interface. Give it a try. Click here to return to FAST Tap here to return to FAST FAST NEW YORK, Dec 2 : The U.S. holiday shopping season kicked off to record online sales. But underlying signs of economic fragility signal a pullback in spending could be looming.
Consumer confidence fell again in November. Still, Americans spent a record $44.2 billion online during the period retailers call Cyber Week - the U.S. shopping bonanza that runs from Thanksgiving through the following Monday - according to Adobe Analytics, which tracks shopper visits to online retail websites.
Record top-line sales should be taken "with a pinch of salt," said John Mercer, head of global research at consumer analytics firm Coresight. Costs have risen, in part due to tariffs, and wealthy shoppers "have been holding up retail all year," Mercer said.
Surveys by market research firm Kantar show that, in the last month, the percentage of consumers who feel able to afford everyday essentials has dropped four percentage points, though the figure remains well above 2023 lows.
In a November survey by consumer analytics firm CivicScience, more than two-thirds of likely shoppers said the price impact of tariffs would affect their shopping, either spurring them to buy gifts earlier, or reducing their hauls.
Discounts were steep this year, suggesting consumers needed more motivation than usual to spend. "Sentiment reflects anxiety, behavior reflects capacity, and discounting bridges the gap," said Kent Smetters, an economics professor at the University of Pennsylvania's Wharton School.
Those behaviors may not signal a recession, but they illustrate "a slow erosion" of financial health for families, said Julie Craig, Kantar's vice president of shopper insights. Craig pointed to Kantar surveys showing a year-to-year decrease in the share of shoppers who say they have enough savings to weather an emergency.
In November, RBC analysts reported lower- and middle-income consumers were "running out of steam," citing flat retail spending that had followed months of front-loading ahead of tariff costs.
The impact of that exhaustion is more likely to emerge in the months after the holiday shopping season, experts say. The new year will bring more direct impacts from stressors like tariff costs, the recent government shutdown, and the related pause in SNAP benefits. "It paints a picture of an increasingly anxious shopper who may be spending in bursts, then pulling back to compensate," Craig said.
Job cuts, which could affect spending, are less common just ahead of the holidays but more common after, said Marshal Cohen, chief retail advisor at consumer research firm Circana.
Mark Mathews, chief economist of the National Retail Federation trade group, is more optimistic. Consumer sentiment has been out of sync with actual spending for about five years, and major contractions have been rare, he said.
"Consumers are trying to stretch their dollar, trading down to lower-priced stores, trying to assuage low sentiment," he said. "But what they're not doing is not spending."
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