WASHINGTON (TNND) — ‘Tis the season for Americans tightening their belts; this holiday shopping season, American consumers plan to significantly cut back.
Shoppers plan to spend an average of $1,595 this season, down 10% from last year, according to Deloitte’s 2025 Retail Survey released Wednesday. This includes a 14% drop in spending on goods and a 6% decline for experiences.
Consumers are likely preparing for tighter times as 77% of those surveyed expect to see higher prices on holiday items and 57% believe the economy will weaken in 2026, the least optimistic outlook recorded by Deloitte since 1997.
“What we’re hearing from (consumers) is that they’re concerned about the economy and they’re also taking stock of their own financial situations,” said Deloitte retail research leader Lupine Skelly.
Paired with this heightened anxiety is a vast majority of consumers planning to search for deals, “trade down” on brands and reuse or recycle gifts. Nearly half said they plan to make their own gifts.
Economizing can look different across income groups, Skelly said.
“We know that the higher income group, when they’re expecting higher prices, they have a little bit more wiggle room to kind of cut back and still keep a pretty festive holiday season. When you look at lower income and middle income groups, when they’re expecting higher prices, they’re really having to make some deeper cuts and what we’re seeing here, especially, is they’re cutting back on areas like decorations and décor and really trying to keep you know, gift-giving pretty stable compared to previous years,” Skelly said.
On a macro level, economists generally have a mixed outlook. According to a survey of economists by the Wall Street Journal taken before the latest escalation in trade tensions with China, experts raised their projections for GDP growth in the fourth quarter to 1.7%, up from their 1% expectation recorded in July. According to the WSJ, the upgrade was driven by increased certainty around President Donald Trump’s tariff policies, even though they have weighed on the economy.
Surveyed economists’ expectations for the job market, however, worsened: They now expect the unemployment rate, which was 4.3% in August, to hover around 4.5% next year as job creation quickly loses steam. According to the WSJ survey, economists expect 49,000 new jobs per month over the next four quarters, a sharp decline from their previous prediction of 74,000 per month.
According to ADP, the economy lost 32,000 jobs in September.
On Wednesday, Treasury Secretary Scott Bessent shared his theory about why the hiring has slowed.
“Between deportations and voluntary deportations, have we seen 2 million people leave the workforce?” Bessent said. “And you know, I think in terms of Americans having jobs, we’re doing quite well.”
