Is this the holiday pullback retailers feared? The latest projections show that American households plan to spend 5% less this holiday season, marking the largest contraction since the pandemic hit in 2020. Gift budgets are taking the brunt: gift spending is projected to fall 11%, dropping to an average of $721 from $814 a year ago, according to PwC’s survey of 4,000 consumers. What’s behind this sharp shift in sentiment? Tariff anxieties and inflation aren’t just rattling markets—they’re directly squeezing main street wallets.
- 84% of Americans expect to cut back spending over the next six months
- Gen Z is especially cautious, with an eye-popping 23% reduction in holiday spend, after a surge in 2024
- Households with children still dominate, set to spend $2,349 on average, while childless households come in at $1,089
Even as shoppers hunt for discounts and shift purchases toward essentials, retailers now face the daunting prospect of a leaner holiday quarter—and less of a safety net for a broader slowdown in consumer demand.
