US Holiday Spending Expected to Drop 5% Led by Gen Z Cuts

U.S. holiday spending in 2025 is expected to decline by about 5%, primarily driven by a sharp 23% reduction among Generation Z, according to multiple surveys conducted by PwC. This marks a significant shift from 2024, when Gen Z holiday budgets surged by 37%, reflecting growing economic uncertainty, inflation, job insecurity, and new financial responsibilities as many from this generation enter adulthood and major life transitions like buying homes and starting families. While Gen Z tightens their wallets and focuses on value and cost transparency, older generations such as Millennials and Gen X plan to maintain their spending levels, and Baby Boomers are the only group anticipating an increase of around 5%. The end of the U.S. 'de minimis' tariff exemption has also contributed to rising prices, pressuring retailers and consumers, with smaller importers and online sellers feeling the squeeze, while large retailers potentially benefit from shifts toward domestic supply chains. Consumers overall are expected to be more deliberate with their holiday budgets, prioritizing value and strategic spending amid ongoing economic concerns. Experts highlight this as a 'coming of age' moment for Gen Z, as they learn to budget more carefully and seek discounts, impacting retail dynamics for the upcoming holiday season.