Economic Data Tracker – 
Thanksgiving didn’t disappoint despite more crosscurrents and uncertainty

Trend watch

Note: As always, there will be a separate Economic Commentary for the monthly jobs report, which will be published on December 6th.

Thanksgiving did not disappoint – in terms of family togetherness, travel, or consumer spending. On the travel front, air passenger counts soared to 3.08 million on Sunday, December 1st, a fresh single-day all-time high. It topped 3.01 million on July 7, 2024.

As far as retail sales, it appears that Cyber Monday is more important than Black Friday. Sales were solid, though shoppers are increasingly choosing online over in-store. The number of shoppers for the five days from Thanksgiving through Cyber Monday was estimated at 197 million by the National Retail Federation. That’s down slightly from 200.4M last year, which was the all-time record in terms of traffic. Otherwise, 2024 topped every year but 2023.

More importantly, spending for the full week was robust, up 4.5% according to Truist card spending data, led by the fast fashion, luxury jewelry, and online categories. (Truist card spending data is heavily concentrated in the Southeastern U.S.)

This mirrors broader measures from other card spending data providers, including Adobe Analytics and Mastercard SpendingPulse.

Zooming out, holiday shopping in total has been solid but December might disappoint somewhat. First, the traditional holiday shopping season – kicked off by Black Friday after Thanksgiving and book-ended by Christmas – is roughly a week shorter this year due to the calendar. It’s also impacted by the elongated shopping season – reinforced by Prime Deal Days (and many copycats) and earlier Black Friday deals – pulling sales forward into October and November from December.

Additionally, wages are growing faster than inflation generally, helping most consumers. Higher-end consumers are further buoyed by “wealth effect,” including stock market gains and increased home values/home equity.

Otherwise, there’s still some skewed year-over-year comparisons due to the timing of Thanksgiving for the activity-based data (slides 5 and 6). 

What’s new this week

• Purchasing managers index (PMI): Mixed view continues (slide 7).
• Job openings up in November but hiring dipped, while quit rate jumped (slide 8).
• Construction keeps climbing, but results differ greatly by segment (slide 9).
• Consumer confidence jumped following the elections, as did concerns about higher prices (slide 10).
• Slimmest U.S. House majority for either party in 94 years (slide 11). 

Our take

We are encouraged by the solid consumer spending and retail sales data from this past week. Similarly, the November job growth was solid. But it was coupled with an uptick in the unemployment rate.

Or the fact that there are mixed trends within the various purchasing managers indices. Likewise, there are strong results paired with weakness within the construction data.

By and large, the recent incoming data has been good, though there’s certainly some mixed vibes in the details. Alas, in this week’s title, we refer to crosscurrents in the data.

We also refer to uncertainty, which is the topic du jour, especially in reference to potential changes in tax and trade policy by the incoming Congress and presidential administration.

At this point, it’s too soon to tell what may happen. Frankly, we’re not entirely sure that they know what will occur, particularly given a razor-thin majority in the U.S. House (see slide 11).

That said, President-elect Trump doesn’t need Congress to enact most tariffs. Yet, tariffs would increase prices, which is the same landmine that the outgoing president stepped on.

We view the threat of tariffs as negotiating leverage to garner concessions and changes rather than a bona fide desire to increase tariffs, especially since Mr. Trump made inflation a key centerpiece of his reelection. Still, if we learned anything during his first term, we don’t believe it’s a hollow bluff either.

Bottom line

We expect continued volatility as markets adjust to the incoming presidential administration. The U.S. economy remains resilient, albeit with uneven growth. It’s certainly not weak, especially when compared to pre-pandemic figures. We expect the Federal Reserve to continue steadily lowering interest rates, which supports economic growth, although the process of normalizing rates will take time to unfold and will likely be bumpy.