America’s Weird Economy: Record Spending + Record Frustration = A Dangerous Mix
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To investors,
Headlines show that Black Friday sales shattered all previous records with an estimated $11.8 billion spent online by American consumers during the one-day event.
That is $11.8 billion spent exclusively online. We don’t have the in-store sales data yet, but all signs point to another record there as well.
This new record is noteworthy because it debunks all the media reports about low consumer sentiment in the economy. The surveys are saying one thing, but the verifiable data at checkout registers is saying something else.
So what is going on here?
Well, this may not be a popular answer, but both groups are actually right. Wealthy citizens are doing well and they went out in full force to purchase discounted products. This has been going on all year. In fact, almost half (48%) of all e-commerce sales in Q2 of this year came from the top 10% of people on the socioeconomic ladder.
At the same time these rich people are gobbling up the coolest clothes and electronics, Navy Federal’s Heather Long points out:
“Americans are frustrated with the economy -- and the outlook for 2026. Every consumer sentiment gauge is saying the same thing: Sentiment is down to the worst levels since April (or since inflation summer of 2022).
Why?
Because the middle class is feeling squeezed. (And lower-income households are basically in a recession)
1) It’s hard to get a job (unless you work in healthcare)
2) The cost of living is up, especially the basics of food, utilities, healthcare, insurance and auto repair.
3) Real incomes are trending down as inflation rises and pay gains are getting stingier.”
But there was something even more interesting about the Black Friday data that can’t be ignored. Lower income consumers are using financing to purchase goods at an unprecedented rate, which means people outside the top 10% are still trying to consume…they just are doing it with credit.
“Headline numbers would make you believe that people are doing better than ever before, but
BNPL services saw a 9% increase this Black Friday
41% of shoppers aged 16 to 24 used BNPL
Younger millennials increased BNPL usage by 87% vs last year
38% of households earning above $100K used BNPL
25% of BNPL users now use it to finance groceries
That’s the story here. People are relying on financing for consumer purchases, more than ever before.”
Ok, that is not good. But maybe there is a glimmer of relief from an otherwise negative story. Buy Now, Pay Later was only 6% of total sales on Black Friday, so it is not a national crisis by any means, but it is something we must continue watching.
The broader story at the moment is that regardless of sentiment, the current administration’s economic policies are creating a very positive impact on the US economy.
Opening Bell’s Phil Rosen writes:
“The economy is booming right now. Atlanta Fed projects GDP near 4% for the third quarter, following 3.9% growth in Q2. The economy isn’t working for everyone, but it’s still growing fast and remains historically productive.”
Remember, economists were predicting economic collapse back in April due to tariffs, but now GDP growth projections are at 4%. Life comes at you fast and most of the doomsday predictors look ridiculous in hindsight.
This GDP boom is carrying into the stock market too. Warren Pies says:
“S&P 500 - 6,750 (and rising) ✅
10-year yield - sub-4% (and falling) ✅
Oil breaking down ✅
Gold holding above $4k ✅”
Warren isn’t alone in his enthusiasm either. Carson Group’s Ryan Detrick is predicting a Christmas rally. He writes:
“S&P 500 was up more than 10% YTD heading into the last two months. November was just flat. The last two months have been up the past 16 times it was up 10% YTD heading into it. Still think Santa Claus comes to town in December.”
So Black Friday was a resounding success. All eyes now turn towards the Cyber Monday reports, while the stock market and GDP continue surging higher. The tale of two experiences is not going away unfortunately. We just have to hope people start understanding they can only win if they own assets and chill.
Hope you have a great start to your week. I’ll talk to everyone tomorrow.
- Anthony Pompliano
Founder & CEO, Professional Capital Management
What I Really Think About Bitcoin, Inflation and Economic Policy
Anthony and John Pompliano dig into whether markets have truly bottomed or if more pain is coming.
They break down the economy, inflation, rates, politics, and immigration — and how all of it is shaping investor psychology right now. Plus, they unpack Mike Green’s argument that America’s real poverty line may be closer to $140,000 than $31,000.
Enjoy!
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What we're seeing play out in retail sales, capital markets and employment data is the privatization gamble that Trump and his team have set in motion. They're betting that the huge amounts of private investment that Trump has attracted, the move toward crypto as a reserve and his deregulation efforts will in turn support the US economy through what could have been a very painful, recessionary transition from taxpayer and government debt-funded economic activity back to primarily private risk capital and private lending-based economic activity. Yes, there will be temporary dislocation of jobs as these massive investments work their way into the economy and a virtuous cycle of true wealth creation is re-ignited. The bigger question is timing: Will the Trump administration be able to move the game pieces fast enough to satisfy a clueless voter base or will the opposition in all its forms along with the media make it too difficult to turn around voter sentiment before next November. At that point, a change of majority in either legislative body would effectively destroy the Trump agenda, set the stage for another major power shift in 2028 and an inevitable return to fiscal insanity.