Holiday shopping in the United States looks different this year. Streets are decorated, mall parking lots are still crowded, and stores are filled with familiar music, but there’s a quiet caution beneath the lights. According to CNBC’s latest All-America Economic Survey, 41% of Americans plan to spend less this holiday season, six points higher than in 2024. Among those reining in their spending, nearly half (46%) cite the high cost of goods as the main reason, marking a ten-point rise from last year’s survey results.
This shift captures more than just changes in consumer mood. It reflects how prolonged inflation has reshaped the family budget, even as wages have inched upward. Inflation has cooled from the peak levels of 2022, but prices remain elevated across nearly every category that touches daily life: groceries, utilities, and travel. The cumulative effect is what economists often call “sticky inflation,” the kind that lingers even as headline numbers soften. Many households are still catching up to these higher costs rather than feeling any real relief.
Retailers see the pattern clearly. Early promotions that once sparked eagerness now compete with restrained shoppers comparing prices across multiple stores and online platforms before making a move. The result is a slower, more methodical spending season. Retail analysts note that discount events such as Black Friday and Cyber Monday have registered strong traffic but smaller ticket totals, suggesting that people are buying, but with limits.
Data from the Commerce Department and major banks align with this more measured tone. Credit card balances continue to climb, exceeding $1.36 trillion nationwide in the third quarter of 2025. Yet, delinquency rates have also ticked up, showing that higher borrowing costs are catching up to households carrying persistent balances. The Federal Reserve’s cautious stance on rate reductions means relief may still be months away.
Meanwhile, wage growth has slowed after two years of brisk gains. The average hourly earnings rose only 3.8% over the past year, compared with 4.4% at the end of 2024. For middle-income families, that slower pay growth paired with high costs translates to smaller discretionary budgets. Even those with stable jobs feel the squeeze when it comes to non-essentials like gifts, decorations, and travel.
Retail giants such as Walmart Inc. (NYSE: WMT), Target Corporation (NYSE: TGT), and Amazon.com, Inc. (NASDAQ: AMZN) have each adjusted their holiday strategies in subtle ways, offering deeper discounts earlier in the season and expanding lower-cost product lines. These moves reflect a recognition that many shoppers now start with a firm spending ceiling in mind. For high-end retailers, the focus has shifted toward loyalty programs and exclusive experiences rather than relying solely on high-margin holiday purchases.
Economic indicators suggest this restraint may persist into 2026. Consumer confidence remains below its long-term average, even with improving sentiment about job security. The U.S. Bureau of Economic Analysis reported that personal savings rates dipped to 3.2% in October, among the lowest levels since the pandemic period. Households appear to be using savings buffers or credit to maintain some level of participation in holiday traditions they value, even if that means scaling back elsewhere.
Walk through any department store this month and you can see these dynamics in the details: shoppers checking prices on their phones, smaller shopping bags, fewer impulse buys. It’s not necessarily gloom, it’s a recalibration. The same holiday spirit remains, but the financial mindset has matured into something cautious and deliberate, shaped by three years of economic turbulence.
How long this tempered approach lasts depends on what happens next with wages, borrowing costs, and consumer confidence. For now, the story of this holiday season is one of balance, an economy still growing but led by consumers carefully measuring each purchase against the price of everything else.
