US Black Friday Shoppers Optimistic Despite Inflation and Cautious Retail Guidance

Bargain-hunting Americans are expected to turn out in record numbers for the start of the US holiday season, but their fatigue at higher prices is making retailers cautious and putting strain on the nation’s economic engine. Despite inflation cooling in October, consumers' perception of higher costs is dampening their desire to spend. Retailers are responding by offering steeper discounts, with nearly 80% of consumers looking to "trade down" for holiday shopping this year. The easing of supply-chain issues means some retailers are under less pressure to discount prices, but S&P expects prices to rise just 0.5% this holiday season compared to the high retail inflation of 6.1% seen in 2022.