Consumers Feeling Less Than Jolly, Pulling Back on Holiday Shopping as Prices Rise and Confidence Plummets
This year, Black Friday put many shoppers in the red. The latest data from the biggest shopping day of the year shows that while Americans’ spent more in 2025, they went home with less as prices continue to climb due to President Trump’s tumultuous economic agenda. Paying more for a smaller gift haul isn’t exactly filling consumers with the holiday spirit: today’s University of Michigan Survey of Consumers reveals that consumer sentiment is 28% lower than one year ago, while perceptions of current economic conditions are nearly 33% lower, both approaching historic lows.
These latest numbers come on the heels of the Conference Board’s Consumer Confidence Index, which shows consumers’ optimism deteriorated by 6.8 points in November, the steepest drop since April, as families confront higher prices at the grocery store and in the gift aisle. Meanwhile, delayed Personal Consumption Expenditures data for September released today shows that consumer spending stalled while inflation remained sticky, with the PCE Price Index ticking up slightly to 2.8%.
As Trump’s reckless tariffs make everyday essentials tough to afford, the added expenses of the holidays means Americans are trimming back their gift lists instead of trimming their trees. Fresh data from Clever Real Estate finds that 72% of Americans expect Trump’s tariffs to make 2025 the most expensive holiday season yet, and over half (56%) are cutting back on gifts just to pay the bills. As a result, two-thirds of Americans (68%) say the holidays now feel more financially stressful than joyful.
The labor market is flashing warning signs as well. Challenger, Gray & Christmas reports 1.17 million announced job cuts so far this year — 54% higher than last year and the highest since the 2020 pandemic — with tariffs driving more than 2,000 cuts in November. Small businesses are being hit especially hard: more than 2,200 entrepreneurs and small firms have filed for bankruptcy this year, up 8% from last year, as they are particularly vulnerable to Trump’s trade war. The latest ADP report finds small firms shed 120,000 jobs in November alone, continuing a months-long streak of losses.
Groundwork Collaborative’s Chief of Policy and Advocacy Alex Jacquez reacted with the following statement:
“As the holidays approach, Trump’s economy is in freefall — and the warning signs in the data are flashing redder than Rudolph’s nose. Across the board, Americans are pulling back on spending, consumer outlook is bleak, and companies are shedding employees as working families and businesses alike brace for more hardship. Most Americans feel more stress than joy about the holidays, and that’s thanks to the Grinch in the White House.”
This week in the Trump Slump, new polling and economic indicators continue to show that President Trump’s actions are deeply unpopular, hurting the economy, and harming America’s workers.
Economic Indicators on Trump’s Handling of the Economy:
- Shoppers are growing increasingly frustrated by rising prices. The Conference Board’s Consumer Confidence Index fell 6.8 points to 88.7 in November, the lowest level since April, while consumers’ assessments of their own financial situation collapsed to lows not seen in over a year.
- The report also found that consumers are scaling back on big purchases and vacations this holiday season, as Trump’s economy is making it more expensive to fill stockings and deck the halls.
- Additionally, today the University of Michigan’s Consumer Sentiment Index preliminary reading showed a marginal improvement within the margin of error. This remains one of the lowest readings in the survey’s history, as consumers know they can’t expect relief anytime soon.
- Inflation remains stubbornly high. September’s delayed PCE Price Index release showed that prices continue to rise with no relief in sight. The core PCE Price Index has increased 2.8% over the past year, persistently above the Fed’s 2% target.
- September’s delayed Producer Price Index (PPI) showed that wholesale goods prices climbed 0.9, the largest increase in nearly two years. As the cost pressures on producers persist, consumers can expect more price hikes ahead.
- Rising prices meant Americans came home with fewer items this Black Friday. While U.S. retail sales on Black Friday increased 4.1% compared to last year, according to data released by Mastercard, closer look reveals this is far from good news: sales data reveals a 7% jump in the average selling price and 1% decline in order volume, as well as a 2% drop in units per transaction. In other words, Americans bought less but paid more, boosting companies’ sales, without bringing more items home.
- Additionally, wealthy consumers have been driving most of the spending, while low- and middle-income consumers pull back.
- As pre-tariff inventory runs down, Americans are hitting the brakes on spending. U.S. retail trade sales cooled in September’s delayed report, showing an increase of only 0.1% from the previous month, versus an increase of 0.5% in August.
- September’s delayed Personal Income and Outlays report showed a similar picture, with consumer spending adjusted for changes in prices almost flat. Year-over-year growth in spending has fallen from 3.3% 2.1% since Trump took office. For durable goods, like cars and furniture, it’s fallen from 5.6% to 2.1%. In September, consumers also cut back on spending for clothing, footwear and recreational goods and services.
- Layoffs are soaring to historic highs. A report from Challenger, Gray & Christmas showed that announced layoff plans this year have reached 1.17 million, 54% higher than last year and the highest since the 2020 pandemic, as tariffs, economic uncertainty and AI advancements are leading to job losses across the country.
- The ADP Employment Report showed the private sector shed 32,000 jobs in November, the biggest drop since 2023. ADP has shown declines in four of the last six months, a concerning trend.
- No relief in sight for Main Street as small businesses continue to struggle under Trump’s economy. More than 2,200 entrepreneurs and small firms have filed for bankruptcy so far this year, up 8% from last year, as they are particularly vulnerable to Trump’s trade war. In contrast, traditional Chapter 11 filings, used by larger businesses and wealthy individuals, rose about 1% to just over 6,000.
- The latest ADP report shows that small firms shed 120,000 jobs, continuing a 4-month string of job losses. Considering that nearly half of private-sector workers are employed by small businesses, this trend raises serious alarm.
- Trump promised a manufacturing comeback, but instead brought a downfall. The ISM Manufacturing PMI fell to 48.2% in November, down 0.5 points from October, while 67% of panelists reported that managing headcounts remains the norm rather than hiring, as the sector struggles to stay afloat in the ongoing trade war.
- Manufacturers shed 18,000 jobs in November, according to the latest ADP report.
- Factory orders increased by only 0.2% in September, after a downwardly revised 1.3% increase in August, according to data released delayed this week due to the government shutdown.
- The rise in warehouse stocks was the steepest in the S&P Global Manufacturing PMI survey’s 18-year history, as manufacturers are making more goods but unable to find buyers, signaling lower production ahead.
Polling:
- Holidays feel more fearful than cheerful. Two-thirds of Americans (68%) say the holidays now feel more financially stressful than joyful, according to new data from Clever Real Estate.
- 72% of Americans expect Trump’s tariffs to make 2025 the most expensive holiday season yet, and over half (56%) are cutting back on gifts just to cover basic expenses, while 38% say this is the first year they’ve worried about affording holiday shopping.
- Consumers plan to spend $550 this year, down from $600, citing inflation (55%) and tariffs (38%) as reasons for cutting back.
- Americans aren’t buying what Trump’s selling. 60% of Americans say Trump makes prices and inflation sound better than they really are — a view shared by even four in ten Republicans, a new CBS news poll found.
- The economy and inflation is the most important issue for voters when judging the Trump administration, and among those who prioritize these issues, 77% say Trump is not spending enough time addressing them.
- Americans say the cost of living has never felt worse. New polling from POLITICO shows that nearly half of Americans (46%) say the cost of living is the worst they can ever remember — including 37% of Trump’s own 2024 voters.
- Additionally, Gallup’s Economic Confidence Index (ECI) fell seven points to -30 in November, the lowest since July 2024, as both Americans’ ratings of current economic conditions and their perceptions of economic improvement have worsened.
- Voters say Trump is to blame for rising prices. Groceries are the number one affordability concern for Americans, and more than half of voters (55%) blame the current administration for the current situation, including 20% of Trump voters, according to polling from POLITICO and Public First. Additionally, 46% of Americans say it’s Trump’s economy now and that his administration is responsible for rising prices.
- Americans are deeply divided on almost everything — but not inflation. In all communities surveyed, inflation or rising prices was listed as the number one issue facing the nation, a new American Communities Project report found. Additionally, in 13 of the 15 communities surveyed across the country, 70% or more of respondents said that inflation or rising prices have worsened in the last 12 months.
- Trump’s approval continues to sink to new lows. Trump’s job approval has fallen five points to 36%, a new low for his second term, and disapproval has climbed to 60%, according to new data from Gallup.
- Both Republicans’ and independents’ ratings of Trump have worsened significantly since last month. Republicans’ approval has fallen seven points to 84%, while independents’ has fallen eight points to 25%.
Expert commentary
- Chris Williamson, Chief Business Economist at S&P Global Market Intelligence said “the health of the U.S. manufacturing sector gets more worrying the more you scratch under the surface […] Profit margins are meanwhile coming under pressure from a combination of disappointing sales, stiff competition and rising input costs, the latter widely linked to tariffs.“
- “At any given point, trade with our international partners is clouded and difficult. Suppliers are finding more and more errors when attempting to export to the U.S. — before I even have the opportunity to import. Freight organizations are also having difficulties overseas, contending with changing regulations and uncertainty. Conditions are more trying than during the coronavirus pandemic in terms of supply chain uncertainty.” (Electrical Equipment, Appliances & Components, ISM Manufacturing PMI survey respondent)
- “Domestic and export business have been lackluster. Our customers are taking prompt orders only and still don’t have confidence to build inventory, much less make expansion plans. In fact, most of any kind of ‘planning’ has been undermined by unpredictability due to inconsistent messaging from Washington.” (Wood Products, ISM Manufacturing PMI survey respondent)
- Rick Newman, who writes The Pinpoint Press, a newsletter on the US economy, said to CNN “The story of the economy right now is it’s a bifurcated economy. If you’re lucky enough to own stocks and own a home, you’re part of the upper slant of that cave, that K-shaped economy… you’re going to be comfortable spending a fair amount of money this year.” In contrast, Newman mentioned that low and middle income people “are going to be pinching pennies this holiday season.”
- Dana M Peterson, the Chief Economist at the Conference Board on November’s Consumer Confidence report “All five components of the overall [Consumer Confidence] index flagged or remained weak. The Present Situation Index dipped as consumers were less sanguine about current business and labor market conditions. … Consumers were notably more pessimistic about business conditions six months from now. Mid-2026 expectations for labor market conditions remained decidedly negative, and expectations for increased household incomes shrunk dramatically, after six months of strongly positive readings.”
- Dr. Nela Richarson, Chief Economist at ADP commented on the latest ADP Employment report: “Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment. And while November’s slowdown was broad-based, it was led by a pullback among small businesses.”
