U.S. holiday spending to dip again in 2025, The Conference Board finds

U.S. consumers are heading into the 2025 holiday season with tighter budgets and heightened caution, according to new data from The Conference Board's Holiday Spending Survey. The average consumer plans to spend $990 on holiday purchases this year, down 6.9 percent from the $1,063 they expected to spend in 2024. In real terms, after adjusting for inflation, this year's planned spending falls well below pre-pandemic norms, the board reported.

The softening outlook reflects several years of elevated prices that have strained household budgets, said Stephanie Guichard, senior economist of global indicators at The Conference Board. "Americans will approach gift-giving and celebrations with restraint this season, as several years of relatively high inflation have raised price levels and squeezed consumers' wallets. Once accounting for inflation, planned holiday spending is well below pre-pandemic levels, with younger and wealthier consumers cutting back the most."

Consumers expect to spend $650 on gifts, a 3.9 percent drop from last year and the lowest total since 2022, and $340 on non-gift items such as food, decorations and wrapping paper. In 2017 dollars, those amounts shrink to $513 and $268, respectively, marking multi-year lows.

Guichard noted that while younger adults under 35 and households earning more than $75,000 are scaling back, consumers over 65 and those earning under $50,000 expect to spend more after reducing holiday budgets last year.

Bargain hunting will play central role in 2025.

Consumers overwhelmingly cited "getting the most out of every dollar" and seeking out discounts as their top considerations. Suggestions from AI systems and social media influencers, while increasingly visible in the digital marketplace, will play only a limited role in purchasing decisions. About 5 percent of consumers said such recommendations would guide them. That share doubled among shoppers under 35.

Concerns about tariffs are also shaping attitudes. If higher import costs push up prices, 54 percent of respondents said they would seek deeper discounts, while 37 percent would simply buy fewer goods.

Despite ongoing price sensitivity, shoppers remain selective about what they give. This year's most popular gift categories include toys and games, which jumped to the top spot from third place in 2024, along with travel experiences and gift cards. Plans to buy beauty products and clothing also rose, while interest declined for books, music, tools and sporting goods.

Online shopping remains a dominant channel, with 43 percent of consumers planning to buy at least half of their gifts online, a figure unchanged from last year. Online purchasing climbed to 54 percent among households earning over $125,000, while 9 percent of all consumers in the survey said they won't shop online at all. Most holiday shopping is expected to take place in November as consumers target Black Friday promotions, though nearly 40 percent will continue buying into December. Fewer than 10 percent began shopping before July, suggesting little evidence of early purchasing to circumvent potential tariff-driven price hikes.

Travel plans also remain modest. Seventy percent of consumers said they will stay home or close to home during the holidays, which is similar to last year. Of those who travel, nearly half will do so by car or rideshare. Forty-five percent plan to fly, up from 43 percent in 2024.

The Conference Board, a non-partisan, nonprofit think tank founded in 1916, publishes the annual holiday spending survey to gauge consumer sentiment heading into the peak retail season.

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