Holiday spending by consumers in the U.S., especially Generation Z, is targeting its largest decline this year since 2020, down 5.3% from 2024 to $1,552 per person, the last comparable post-pandemic drop, when spending fell 7.6% to $1,187.
According to a report by Pwc, which surveyed 4,000 U.S. shoppers during June and July, the retrenchment of especially consumers aged 17 to 28 amid economic uncertainty is the main cause of this decline, with average spending per person at $1,552, down 5.3% from a year earlier.
However, millennials, Generation X and baby boomers said they will spend about the same as last Christmas.
Generation Z holiday spending in the U.S. will drop 23% by 2025.
Spending on gifts for the upcoming year-end holidays in the U.S. will also suffer a drop, specifically 11%, which means spending up to $721 per person, down from $814 last year.
Budgets on holiday gifts for Generation Z are expected to fall 23% in 2025, a sharp drop after a 37% increase in 2024. “Gen Z’s in-store traffic has been increasing because they want that experience, but they don’t necessarily transact in-store,“ noted Kelly Pedersen, a partner at PwC.
In addition, the tariff measures announced by President Donald Trump last August have led to about 84% of consumers potentially cutting back on spending over the next six months.