How an Economist Sees Black Friday: How It Could Affect You Comprehensive Guide

How an Economist Sees Black Friday: Black Friday offers shoppers significant discounts and special deals, making it a day to save on holiday gifts and other purchases. It is regarded as the start of the holiday shopping season, occurring the day after the U.S. Thanksgiving holiday, which falls on the fourth Thursday of November.

Economists often use Black Friday sales to gauge the country’s economic health and assess consumer confidence. Lower Black Friday sales numbers can be seen as an indication of a slowing economy. Building on this economic relevance, it is important to understand how the day has become such a significant shopping event.

Many retailers offer unique online and in-store sales on Black Friday. To take advantage of heightened shopping activity, many open their doors early in the morning or keep their operations open late into the night on Thanksgiving. It has also become common for retailers to promote Black Friday specials well before the actual day. This intensifying competition contributes to the distinctive consumer behaviours seen during the event.

Some of the most enthusiastic deal-seekers have been known to camp out on Thanksgiving night to be first in line at their favourite stores, while others might even skip Thanksgiving dinner to head to stores opening on Black Friday. Building on this early rush, sales often continue through Sunday, with both brick-and-mortar businesses and online retailers experiencing a bump.

Stores might spend a year planning for Black Friday. They use the day to clear excess inventory by offering deep discounts on holiday decorations and gifts.

Door-busters are usually expensive items like TVs or smart devices. Stores hope these draw in customers who may also buy other products with higher profits. Ads are very popular, so stores try to prevent leaks early.

When stores lack adequate security, competition among shoppers for limited quantities of popular items has at times led to injuries. For instance, on Black Friday in 1983, shoppers crowded stores to purchase Cabbage Patch Kids dolls, a highly sought-after toy reported to be in short supply. In 2008, a store employee was tragically injured during a large crowd rush as doors opened.

Stores held big sales after Thanksgiving before the term “Black Friday” even existed. They offered deals on this day because many workers had the day off, helping kick off holiday shopping.

Some believe the term Black Friday refers to prosperity, a reference to the traditional bookkeeping method of recording earnings in black ink and losses in red ink. The idea is that retailers might earn enough on this Friday and the following weekend to ensure annual profitability.

But long before it appeared in ads and promotions, tired Philadelphia police officers actually came up with the phrase. In the 1950s, the day after Thanksgiving brought crowds of shoppers and visitors to Philadelphia. While local merchants bragged about big sales and new holiday decorations that day, and the city hosted the Army-Navy football game that weekend, police had their own challenges keeping order.

Traffic officers worked extended shifts to manage heavy pedestrian and vehicle traffic and were required to remain on duty. Over time, officers began referring to the day as Black Friday because of the challenges it posed.

Retail employees adopted the phrase “Black Friday” to describe the crowds and challenges faced on that day. For decades, the term was primarily used in Philadelphia and nearby areas such as Trenton, New Jersey.

By the mid-90s, “Black Friday” was used all over the U.S. in ads to highlight the idea of making a profit, as shown by the use of black ink. With the terminology now widespread, the day began to evolve further.

Somewhere along the line, Black Friday went from jammed streets and packed stores to frantic customers battling for parking and jostling for the hottest new toy—a shift that illustrates how Black Friday became the wild, over-the-top shopping event we know today.

The 2000s marked the era when Black Friday was officially named the biggest shopping day of the year, a title that had previously belonged to the Saturday before Christmas. As more stores advertised post-Thanksgiving bargains as can’t-miss deals and Black Friday discounts deepened, American shoppers increasingly embraced this major shopping event. This shift in consumer behaviour drove further changes in retail strategy, such as extending shopping hours.

Walmart said in 2011 that it would begin selling on Thanksgiving evening, rather than opening its doors on Friday morning. This change sparked a frenzy among other big-box stores, which soon followed suit. As a result, Black Friday has become a longer event, more like a Black Weekend.

The National Retail Federation (NRF) said 197 million people in the U.S. shopped over the five-day holiday weekend from Thanksgiving through the following Monday in 2024, down from over 200 million the year before. Each shopper spent an average of $235 on gifts. These numbers show the ongoing importance of the longer holiday shopping period.

For internet shops, a similar tradition has evolved on the Monday after Thanksgiving—Cyber Monday. As shoppers engage in Black Friday at brick-and-mortar stores, the following Monday brings online bargains, capitalising on consumers being back at work after the holiday weekend. To compete with Black Friday deals at physical establishments, online companies usually announce their deals far in advance of the actual day.

Some investors and stock analysts use Black Friday sales figures to gauge the health of the retail sector. Others doubt that Black Friday predicts fourth-quarter performance in financial markets, saying it mainly affects short-term profits or losses. This debate shows different views on the day’s economic importance.

But generally, the stock market might be affected by people getting extra days off for Thanksgiving or Christmas, he said. It usually experiences higher trading volume and returns on the day before a holiday or long weekend, a phenomenon known as the holiday impact or weekend effect. As a result, many traders try to profit from these seasonal bumps.

Black Friday is the Friday after Thanksgiving. Black Friday in 2025 falls on Nov. 28.

Some economists see Black Friday as a way to measure how confident people are in spending extra money now and in the future.

Shop.org, part of the National Retail Federation, started Cyber Monday in 2005. It is the Monday after Thanksgiving weekend.

Black Friday, the day after Thanksgiving, marks the start of the holiday shopping season. Shoppers look for big discounts, while analysts check total sales to see how confident people feel about the economy, linking spending to the economic outlook.