The U.S. economy as well as the consumers are likely to be hit hard this holiday season. According to an annual Deloitte survey published on Wednesday, as the peak holiday shopping season approaches, most U.S. consumers have a downbeat outlook on the economy.
Most consumers surveyed — 57% — said they expect the economy to weaken in the year ahead, the consulting firm found in a poll of roughly 4,000 respondents. That compares to 30% who expected a weaker economy ahead of the year-ago holiday season and 54% in 2008, one of the years of the Great Recession.
“We’ve been talking about the resilient consumer for a while now, that despite all these pressures, the U.S. consumer continues to spend and we keep seeing growth and spending for retail,” said Brian McCarthy, retail strategy leader for Deloitte. “This outlook is starting to suggest that we’re getting towards the end of that resilience.”
It’s the first holiday season since President Donald Trump’s latest wave of tariff hikes on many imports.
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“They’re thinking about income and the job market and the concerns about the economy is going to throw a lot more pressure on them because they haven’t yet had time to sort of build up their savings or plan for less rosy economic environments,” he said.
Gen Z consumers, which in the survey were between ages 18 and 28, said they plan to spend an average of 34% less this holiday season than a year ago, and millennials, respondents between age 29 and 44 in the poll, said they expect to spend an average of 13% less this holiday season.
For younger consumers, such as Gen Z and millennials, the data shows clear signs of financial strain, with notable planned reductions in holiday spending. This is significant because these groups represent a substantial and growing share of consumer demand. Reduced spending from them could dampen retail sales, affecting businesses during what is typically their most profitable season.
The holiday season has long been a bellwether for economic health, and this year’s cautious outlook may reflect broader concerns about affordability, wages, and future financial stability. The mention of new tariffs and political uncertainty adds another layer of complexity, suggesting that economic and policy decisions are feeding into consumer pessimism.
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In general terms, this trend highlights a turning point: the U.S. Consumer, long credited with propping up economic growth, may finally be pulling back. If this reduced confidence and spending continue into 2026, it could signal the start of a broader slowdown, underscoring the need for policymakers and businesses to respond to growing financial anxiety across the population.
Consumer spending drives roughly two-thirds of economic activity, so any sustained pullback, especially from younger generations who are entering their prime spending years, could slow overall growth. Policymakers and businesses will need to closely monitor these trends and consider targeted measures to support household incomes and confidence.
Stimulus efforts, wage growth initiatives, or policies aimed at reducing inflationary pressures could help stabilize spending. Meanwhile, companies may need to innovate with pricing, promotions, and product offerings to better meet the changing needs and budgets of cautious consumers. Ultimately, the coming months will be crucial in determining whether this cautious outlook evolves into a more significant economic slowdown or a temporary adjustment in spending behavior.