US Holiday Spending Expected to Dip Amid Tariffs and Increasing Prices

Holiday spending in the U.S. is projected to decline this year, influenced by Gen Z’s concerns regarding rising prices, tariffs, and the increased cost of living, according to PricewaterhouseCoopers.

A report released on Wednesday reveals that consumers are expecting to cut their seasonal spending by roughly 5% on average compared to 2024. This is the first notable drop since the pandemic commenced in 2020, as reported by PwC.

Retailers have warned that tariff pressures are likely to escalate as businesses deplete inventories that were imported before the increased tariffs took effect. Walmart Inc. CEO Doug McMillon noted last month that costs are rising weekly, a trend that is anticipated to continue.

So far, companies have managed to avoid drastic price hikes, prompting consumers to focus on products that offer the best value. Although U.S. retail sales have generally stayed stable this year, economists have expressed concerns due to indicators of a weakening job market and increasing inflation expectations.

More than 80% of shoppers surveyed in June indicated plans to cut back on spending in the next six months. The most significant reduction is expected among Gen Z respondents aged 17 to 28, who plan to decrease holiday spending by 23%. In contrast, millennials, Gen X, and Baby Boomers anticipate spending about the same or slightly more than last year.

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