US holiday spending expected to drop on tariffs, higher prices

Holiday spending in the US is poised to decline this year due to Gen Z’s concerns about rising prices, tariffs and a higher cost of living, according to a survey by PricewaterhouseCoopers.

A report released Wednesday shows consumers expect to cut their seasonal spending by about 5% on average compared with 2024. That would mark the first notable drop since the pandemic hit in 2020, PwC said.

Retailers have warned that pressure from tariffs is likely to increase as companies sell through merchandise that was imported before higher levies were put in place. Walmart Inc. Chief Executive Officer Doug McMillon said last month that costs are going up each week — a trend that is expected to continue.

Companies have so far refrained from across-the-board price hikes, and consumers are responding by opening their wallets for goods that offer the best value. While US retail sales have broadly held up this year, economists have expressed caution given signs of weakness in the job market and a rise in inflation expectations.

More than eight in 10 shoppers surveyed in June said they planned to cut back on their spending over the next six months. The biggest pullback was seen among Gen Z respondents ages 17 to 28, who expect to trim holiday spending by 23%. On the other hand, millennials, Gen X and Baby Boomers said they’ll shell out about the same or more than last year.

© 2025 Bloomberg

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