The forecasts: The holiday season may bring more gloom than cheer for retailers as consumers tighten spending amid economic uncertainty.

• Average per-person spend during the season is projected to fall 5.3% YoY to $1,552, PwC reports. That’s the first significant drop since the 2020 pandemic.
• Gen Z is leading the pullback, with their holiday budgets set to plunge 22.5% after soaring 37.4% in last year’s survey (their actual spending rose just 6%, per PwC’s card data). That reversal reflects the mounting pressure they face from a stagnant job market, rising fixed costs, and thin savings. One in 4 (25%) Gen Zers now say their finances are worse than a year ago, up from 17% in 2024.
• Tariffs may be amplifying the pullback. A July CivicScience survey found 54% of consumers under 30—along with 47% of all gift buyers—plan to buy fewer or cheaper gifts due to tariff concerns.