A recent study by TransUnion, released on November 21, 2025, indicates that millennials and Generation Z are leading a wave of consumer optimism heading into the holiday season, despite ongoing economic challenges tied to inflation and trade tariffs. The Q4 2025 Consumer Pulse report, based on a survey of 3,000 U.S. adults conducted between October 1 and 14, found that 65% of millennials and 63% of Gen Z respondents felt positive about their household financial outlook over the next year—outpacing Gen X at 50% and Baby Boomers at 45%.
Spending intentions reflect this generational gap: 58% of Americans plan to spend more than $250 during the holidays, up from 56% the previous year. Millennials and Gen X showed the largest year-over-year increases in planned expenditures, with 18% and 16% respectively expecting to spend more than older cohorts. Half of all consumers intend to spend between $100 and $500, while 18% anticipate spending $501 to $1,000, and 12% plan to exceed $1,000—a two-point rise from 2024.
Credit cards are expected to play a central role, with 42% of shoppers planning to use them for holiday purchases—an increase of five percentage points from the prior year. Over 40% of respondents said they would rely more heavily on credit to manage expenses, signaling resilience even amid financial strain. At the same time, 30% reported canceling subscriptions, 52% cut back on non-essential spending like dining and entertainment, and 24% increased emergency savings.
Income dynamics reveal disparities: 79% of high-income households (earning $100,000 or more) said their finances were on track, compared to only 51% of lower-income groups. Just 26% of those earning under $50,000 felt their income kept pace with inflation, versus 45% among higher earners. Expectations for future wage growth have also softened, with 48% anticipating raises in the next year, down from 53% in 2024.
Fraud awareness remains high, with 42% of consumers reporting exposure to phishing, smishing, or vishing attempts—though victimization dropped to 7% from 9% the year before. Younger generations are more proactive in monitoring their credit, with 65% of Gen Z and 64% of millennials checking monthly, compared to lower rates among older demographics.
Retail trends show early shopping behavior, with 34% starting purchases in October, largely driven by tariff-related price fears affecting 71% of these early shoppers. October retail sales rose 5%, suggesting strong pre-holiday momentum. Meanwhile, demand for new credit declined overall to 30%, but remained elevated among younger groups—46% of millennials and 44% of Gen Z plan to apply for financing, primarily for credit cards (55%) or auto loans (23%).
According to Cecilia Seiden, VP of Retail, eCommerce and CPG strategy at TransUnion, consumers are making more deliberate choices to stretch their budgets. She advised marketers to adopt targeted, data-driven strategies rather than broad campaigns to effectively engage today’s value-conscious shoppers.
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TransUnion released its Q4 2025 Consumer Pulse study on November 21, 2025, revealing younger consumers are driving higher spending intentions and financial optimism heading into the holiday shopping season despite persistent economic uncertainty around tariffs and inflation. n nThe research showed 65% of millennials and 63% of Gen Z expressed optimism about their household finances over the next 12 months, according to the consumer credit reporting company. These figures significantly outpaced older generations, with Gen X at 50% and Baby Boomers at 45% optimism. Overall consumer optimism stood at 55%, down three percentage points from the same period in 2024. n nSpending plans reflected this generational divide. The study found 58% of Americans planned to spend more than $250 during the holiday season, representing a two-percentage-point increase from 56% last year. Millennials and Gen X showed the biggest year-over-year increases in planned spending, while Gen Z at 16% and millennials at 18% planned to spend more than older generations. n nHalf of consumers said they would spend between $100 and $500 this holiday season, with 18% planning to spend between $501 and $1,000. Twelve percent expected to spend over $1,000, marking a two-percentage-point increase compared to 2024. The proportion of consumers planning to spend the same as last year reached 46%, up from 44% in Q4 2024. n nCredit cards emerged as the dominant payment method for holiday purchases. Planned usage of credit cards jumped five percentage points from 2024 to reach 42%, according to TransUnion ‘s data. More than 40% of shoppers expected to rely more heavily on credit cards, signaling continued consumer resilience even amid concerns about tariffs and inflation. n n”Approximately six in 10 Americans plan to spend over $250 this holiday season,” said Cecilia Seiden, VP of Retail, eCommerce and CPG strategy at TransUnion. “However, many consumers are struggling, as evidenced by recent retail earnings reports.” n nThe study, which surveyed 3,000 adults between October 1 and October 14, 2025, revealed persistent economic concerns weighing on consumer sentiment. Despite elevated spending intentions, 81% reported inflation as a top-three financial concern. Groceries remained the price increase most concerning to consumers at 79%, holding nearly steady with 80% a year ago. n nInsurance concerns climbed from 43% in Q4 2024 to 47% in Q4 2025, while medical care worries increased from 41% to 45%. The research showed 86% of consumers expressed concern about the impact of international trade tariffs on their household finances, up slightly from 85% in the previous quarter. n nThe data revealed stark polarization across income levels regarding household financial conditions. High-income households earning $100,000 or more annually reported significantly better positioning, with 79% stating their finances were better than or as planned at this point in the year. In contrast, just 51% of lower-income households reported similar outcomes. n nIncome growth appeared to be moderating. TransUnion found 27% of consumers reported their incomes increased in the last three months, down two percentage points from the previous quarter and from a year ago. Meanwhile, 56% said their incomes stayed the same, representing a four-percentage-point increase over both Q3 2025 and Q4 2024. n nExpectations for future income growth also tempered. The study showed 48% expected their incomes to rise in the next year, compared to 53% in Q4 2024. Another 43% expected income to stay the same, up from 40% last year. n nHigh-income households demonstrated greater ability to maintain spending amid economic uncertainty. The research found 45% of high-income consumers said their incomes kept up with inflation, compared to just 26% of low-income households earning less than $50,000 annually and 36% of medium-income households earning between $50,000 and $99,999. n nUS personal consumption expenditure rose 0.6% in August 2025, according to the Bureau of Economic Analysis data referenced in TransUnion ‘s report. This growth occurred despite 2025 being characterized by constant economic change involving inflation pressures, tariff uncertainty and employment concerns. n nHigh-income households planned to maintain or increase spending the most across multiple categories over the next three months. Medical services led at 89%, followed by digital services at 83%, retail items like clothing and electronics at 69%, discretionary spending on dining and entertainment at 63%, and large purchases like appliances and cars at 56%. n nThe survey revealed 41% of consumers planned to conduct their holiday shopping online during Thanksgiving, Black Friday and Cyber Monday, while 33% intended to shop in person on Thanksgiving Day and Black Friday. These figures aligned with broader retail trends showing consumers concentrating purchases during traditional promotional periods. n nCredit demand patterns showed shifts in consumer behavior. Plans to seek new credit or refinance existing credit in the next year fell to 30%, down from 33% in Q3 2025 and 31% a year ago. However, demand remained particularly strong among younger generations, with 44% of Gen Z and 46% of millennials planning to apply for credit. n nAmong those planning to apply for credit in the coming year, 23% said they would seek a new auto loan or lease, up from 19% in Q3 2025. New credit cards remained the top credit action at 55%, while 20% planned to increase available credit on existing credit cards. n nTwo-thirds of consumers reported having sufficient access to credit and lending products, while 68% said they would be approved if they needed one. The research showed 88% believed access to credit and lending products was important to achieve financial goals, though this figure declined two percentage points from the previous quarter. n nSeiden emphasized the need for precision in marketing approaches. “Consumers are making more deliberate and value-driven choices to stretch every dollar,” she said. “To win in this climate, brands and marketers need to shift from broad strokes to precision and focus by using targeted, identity-powered insights that meet consumers where they are and speak directly to their needs.” n nBudget adjustments reflected economic pressures across consumer segments. The study found 52% of consumers cut back on discretionary spending such as dining out, travel and entertainment in the last three months. Another 30% canceled subscriptions or memberships, while 24% saved more in emergency funds. n nCredit usage increased among consumers managing household budgets. TransUnion data showed 17% of consumers increased their usage of available credit in the last three months, while 22% paid down debt faster. Retirement savings saw mixed activity, with 16% saving more for retirement but 15% cutting back on retirement savings and 13% using retirement savings. n nRecent research indicated 34% of consumers began holiday shopping in October or earlier, driven largely by tariff concerns affecting 71% of shoppers. This early shopping behavior created challenges for marketers attempting to optimize campaign timing and budget allocation across extended promotional periods. n nThe Q4 2025 data showed continuing concerns about fraud and identity protection. TransUnion found 42% of consumers reported being targeted with an email, online, phone call or text messaging fraud scheme but did not fall victim, representing a three-percentage-point increase from Q4 2024. Another 7% said they were targeted and became victims, down from 9% a year ago. n nPhishing schemes remained the most frequently reported fraud type at 46% of those targeted, followed by smishing at 45% and vishing at 34%. Older generations reported experiencing these scams more frequently than younger consumers, with 51% of Gen X and Baby Boomers targeted by phishing compared to 30% of Gen Z and 43% of millennials. n nCredit monitoring habits varied significantly across generations. The study showed 54% of consumers reported monitoring their credit at least monthly, though 11% claimed they don ‘t check their credit at all. Gen Z at 65% and millennials at 64% monitored their credit at least monthly at the highest rates among surveyed generations. n nThe research methodology involved an online survey of 3,000 adults conducted in partnership with third-party research provider Dynata. The survey achieved statistical significance at a 95% confidence level within plus or minus 1.8 percentage points. TransUnion conducted the research during the first two weeks of the US government shutdown that began October 1, 2025, though only 35% of respondents listed jobs among their top three financial concerns. n nRetail sales data from October 2025 showed 5% growth as consumers prepared for the holiday season, providing evidence supporting strategic holiday planning. The timing of consumer spending rebounds following September ‘s monthly decline suggested concentrated demand during November and December promotional periods. n nThe implications extend beyond retail into advertising strategy. Retail media networks are projected to capture approximately 20% of total global advertising revenue by 2030, exceeding $300 billion according to industry forecasts. The concentration of consumer spending during holiday periods makes fourth-quarter planning critical for retailers and advertisers balancing inventory availability with marketing investment. n nTransUnion ‘s findings arrived as holiday spending forecasts indicated consumers would spend $890.49 per person on average, representing the second-highest amount in 23 years of tracking by the National Retail Federation. The correlation between credit card usage intentions and overall spending patterns suggested consumers maintained purchasing power through strategic use of available credit. n nThe generational divide in financial optimism and spending behavior presented distinct opportunities and challenges for marketers. Younger consumers demonstrated greater willingness to maintain or increase spending despite economic uncertainty, while older generations exercised more caution amid persistent inflation and tariff concerns. n nTimeline n nOctober 1-14, 2025: TransUnion conducted Q4 2025 Consumer Pulse survey of 3,000 adults in partnership with Dynata n nOctober 1, 2025: US government shutdown began during survey period n nOctober 9, 2025: September retail spending data showed 0.49% monthly decline as consumers paused before holiday season n nOctober 16, 2025: National Retail Federation announced consumers plan to spend $890.49 per person on holiday items n nOctober 27-28, 2025: Wunderkind survey revealed 34% of consumers began holiday shopping in October with 71% citing tariff concerns n nNovember 7, 2025: National Retail Federation released Global Port Tracker projecting November-December import volume slowdown n nNovember 2025: Retail sales grew 5% in October as consumers prepared for holidays n nNovember 21, 2025: TransUnion released Q4 2025 Consumer Pulse study showing younger consumers driving holiday optimism n nNovember 28, 2025: Black Friday represents year ‘s largest promotional sales event n nDecember 1, 2025: Cyber Monday follows as second major holiday shopping date n nSummary n nWho: TransUnion surveyed 3,000 American adults aged 18 and older across all states in partnership with third-party research provider Dynata, with quotas balancing responses to census statistics on age, gender, household income, race and region. Generations were defined as Gen Z (18-28 years old), millennials (29-44), Gen X (45-60), and Baby Boomers (age 61 and above). n nWhat: The Q4 2025 Consumer Pulse study revealed younger consumers driving higher financial optimism and holiday spending intentions despite economic uncertainty, with 65% of millennials and 63% of Gen Z optimistic about household finances over the next 12 months, 58% of Americans planning to spend more than $250 this holiday season (up from 56% last year), millennials and Gen X showing the biggest year-over-year increases in planned spending, and over 40% of shoppers expecting to rely more on credit cards with planned usage jumping from 38% to 42% year-over-year. n nWhen: TransUnion conducted the online survey October 1-14, 2025, spanning the first two weeks of the US government shutdown, and released results on November 21, 2025, ahead of the Black Friday (November 28) and Cyber Monday (December 1) shopping periods that traditionally mark the start of the holiday shopping season. n nWhere: The research covered United States resident demographics with all 50 states represented in survey responses, examining consumer attitudes and behaviors about household budgets, spending, debt, credit access, fraud protection and identity monitoring across income levels, generational cohorts and geographic regions.