The term "Black Friday" carries a deeper meaning than most shoppers realize. While many associate it with door-buster sales and long lines, the name originated from accounting practices. Retailers historically operated at a loss ("in the red") for most of the year, only becoming profitable ("in the black") during the holiday shopping season starting the day after Thanksgiving.

This shopping phenomenon emerged naturally from consumer behavior patterns. After Thanksgiving celebrations concluded, people found themselves with free time and shopping became a default activity. This timing proved perfect for retailers, creating a concentrated period of consumer spending that would carry them through the end of the year.

Strategic Timing: A Presidential Economic Decision

In the 1930s, President Roosevelt made a calculated move to help boost retail sales by standardizing Thanksgiving's date to the fourth Thursday of November. This decision, later codified by Congress, created a consistent timeline for holiday shopping and helped retailers better plan their sales strategies.

This standardization demonstrates how deeply retail spending patterns are woven into American economic policy. The decision created a predictable calendar for both consumers and businesses, establishing a framework that continues to shape holiday shopping patterns today.

The Modern Reality: Self-Gifting and Spending Patterns

Current research reveals an unexpected trend: Black Friday shopping is largely driven by self-purchasing rather than gift-buying. Consumers often delay personal purchases in anticipation of Black Friday deals, creating a concentrated period of both self-directed and gift-oriented spending.

This shift in consumer behavior has transformed Black Friday from a pure gift-shopping day into a hybrid shopping event. Retailers have adapted their strategies accordingly, offering a wider range of products and creating marketing campaigns that appeal to both self-shoppers and gift buyers.

The Credit Card Surge and Economic Warning Signs

Recent data from the Federal Reserve shows troubling trends in consumer credit behavior. Credit card rejection rates for existing cardholders seeking limit increases have reached unprecedented levels, with approximately 45% of requests being denied. This rejection rate surpasses levels seen in previous economic downturns.

Mortgage refinancing applications are facing similar challenges, with a 22% rejection rate. This is particularly significant because current refinancing applications are primarily for cash-out refinancing, indicating consumers are seeking additional funds rather than better interest rates. The combination of high credit card utilization and increased refinancing attempts suggests consumers are facing mounting financial pressure.

Bottom Line

While holiday shopping statistics might paint a picture of economic strength, the underlying credit data tells a different story. The surge in credit applications, coupled with high rejection rates, indicates consumers are increasingly reliant on credit to maintain spending levels. This pattern of credit-dependent consumption, rather than signaling economic health, may be a warning sign of growing financial strain among American consumers.