Video Commentary

Black Friday's Overstated Importance

If Black Friday dictated US retail and the economy, the proof would be apparent in the data. The global economy is much bigger than a single shopping day.

Black Friday's Overstated Importance from Fisher Investments on YouTube.

Video Transcript

Hi, and welcome to a special after-Thanksgiving MarketMinder minute.

A lot of people believe Black Friday is the most important day of the year for US retailers. Experts try to forecast consumer behavior and measure overall economic health based on that one day’s results, and the financial media fuels this even more with nonstop coverage. But, as you can probably guess, Black Friday simply isn’t important as many would have you think. One day can’t possibly tell you about the strength of US consumers or retailers, let alone the entire economy. If you’re an investor, don’t get caught up in this hype, or any data from such a short period. You need to pay attention to longer-term trends, and Black Friday sales data just isn’t one of them.

History shows I’m right. If Black Friday was really such a big deal, then November would be a hugely influential contributor to the year’s overall retail sales number, and big moves there would be important. But since 2009, November retail sales accelerated from October only half the time, even while overall retail sales numbers have continued to climb. And, remember that even though retail sales get a lot of press coverage, that number excludes most services, which means it ignores about 35% of all consumer spending in the US.

The other thing to remember is that shopping behaviors have changed over the years. We now have things like “Small Business Saturday,” “Sofa Sunday,” and “Cyber Monday,” all of which encourage spending. Likewise, online retailers offer discounts that are completed disconnected from Black Friday, lessening its impact.

So, if you fought through the crowds last Friday to spent money at your favorite retailer, and you got what you wanted, that’s great. But don’t put too much stock into how big the crowds were or any of the coverage you saw on TV that day. The global economy is much, much bigger than a single shopping day, and Black Friday sales won’t have much impact on your portfolio.

That’s all for this video. For more on this and other topics, please visit MarketMinder.com.