Holiday spending in the U.S. is expected to fall this year, with Gen Z consumers in particular tightening their belts, according to a new report from a leading consulting firm.
PwC’s Holiday Outlook 2025, released on Wednesday, shows that Americans are expected to spend an average of $1,552 this holiday season, which is down 5 percent from last year. This trend is largely driven by Gen Z consumers who expect to cut their 2025 holiday spending by about 23 percent, according to the report.
Meanwhile, consumers from older generations — millennials, Gen X and baby boomers — expect their holiday spending to stay the same or increase this year, the survey shows.
Even with older generations preparing to spend more this winter, economic concerns are still expected to impact holiday spending. About 53 percent of consumers said that general price increases are likely to affect their holiday spending decisions, the report says.
PwC expects consumers will still prioritize gift-giving and experiences over the holiday season, even if it means going over budget.
“Our survey shows that many are still planning to travel, host celebrations and exchange gifts, even if it strains budgets and means adjusting elsewhere,” the report says.
Consumers are also planning to cut back general spending amid economic concerns. About 84 percent of consumers said they’re planning to generally spend less over the next six months, citing “rising prices, new tariffs and the higher cost of living,” the report says.
A quarter of Gen Z consumers also said their financial situation is worse today than it was this time last year. This is “likely due to today’s tougher job market combined with rising fixed costs from major life changes and limited savings,” the report said.
The swing in Gen Z’s spending compared to 2024 is stark, when their projected holiday budgets spiked by 37 percent.
The consulting firm noted it surveyed consumers in June, when there was “more uncertainty around tariffs, which have since been delayed or paused.”
“Economic signals continue to shift and, between now and December, purchasing behavior could evolve in response,” the report reads.
President Donald Trump introduced a slew of sweeping tariffs on April 2, calling it “Liberation Day” for the U.S. Many of those levies were paused or canceled amid negotiations, and Trump unveiled a new list last month. However, a U.S. Court of Appeals ruled Friday that many of the president’s global levies were imposed illegally.
