US Economic Confidence Sinks to 17‑Month Low as 2025 Holiday Spending Plans Crater, Gallup Finds

U.S. consumers are heading into the heart of the 2025 holiday shopping season feeling markedly gloomier about the economy — and promising to spend less than they have in years.

A new Gallup survey shows its Economic Confidence Index (ECI) dropped seven points in November to -30, the lowest reading since July 2024 and a sharp break from the slow improvement seen earlier in the year. At the same time, Americans’ self‑reported holiday gift budgets have collapsed by an average of $229 since October, the steepest mid‑season cut Gallup has recorded in nearly two decades of tracking the question. ^[1]

The findings, amplified in coverage by The Hill and others, land just days before the Federal Reserve’s final policy meeting of 2025 and underscore a growing disconnect: consumer sentiment is sour, but actual spending and labor market data remain mixed rather than catastrophic. ^[2]

Gallup’s Economic Confidence Index: -30 and Sliding

Gallup’s Economic Confidence Index summarizes Americans’ views of the economy on a scale from +100 (very positive) to -100 (very negative), combining:

How people rate current economic conditions (excellent, good, only fair or poor), and
Whether they think the economy is getting better or getting worse. ^[3]

In the November 3–25 survey, conducted during the final stretch of the nation’s longest federal government shutdown and amid stock market volatility, Gallup found: ^[4]

The ECI fell from -23 in October to -30 in November, a 7‑point slide.
Only 21% of adults describe current conditions as excellent or good, down from 24% in October and the lowest share since March.
40% say conditions are poor, up from 37% the month before.
Just 27% think the economy is getting better, while 68% say it is getting worse — the most pessimistic outlook since mid‑2024.

By Gallup’s own history, this is a notably bleak mood. The index hit a recent peak of +41 in February 2020 before plunging during the pandemic and inflation surge, bottoming at -58 in June 2022. It had improved gradually and hovered between -14 and -22 for most of 2025 before November’s drop. ^[5]

Labor market worries are rising too

The same poll shows confidence in the job market deteriorating:

33% of Americans say it is a good time to find a quality job.
63% say it is a bad time — the worst reading since early 2021. ^[6]

This snapshot came before the delayed official September jobs report (released November 20 due to the shutdown) showed unemployment ticking up to about 4.4%, and before private data flagged unexpected declines in November private payrolls. ^[7]

Taken together, the numbers help explain why Americans tell pollsters they feel like the economy is on shakier ground, even as headline indicators remain far from recessionary.

Record‑Breaking Cut to 2025 Holiday Spending Plans

If you want to see how that unease shows up in everyday life, look at what people say they’ll spend on gifts.

Gallup asked Americans in October and again in November how much they expect to spend on Christmas or other holiday gifts: ^[8]

In October, the average planned gift budget was $1,007.
By November, that had fallen to $778.

That’s a $229 drop — about a 23% cut in just one month — and the largest mid‑season decline Gallup has ever recorded, even bigger than the $185 plunge during the 2008 financial crisis. ^[9]

It’s not just a seasonal wobble:

This year’s November estimate of $778 is also well below last November’s $1,012.
Gallup notes the year‑over‑year decline in planned holiday spending is the sharpest in its trend. ^[10]

Who is cutting back the most?

The pullback isn’t evenly distributed across the income ladder:

Higher‑income households (≥$100,000)
- October: $1,479
- November: $1,230
- November 2024: $1,578
  → Roughly a 17% cut from October and a sizable drop from last year.
Lower‑income households (<$50,000)
- October: $651
- November: $384
- November 2024: $607
  → About a 40% cut from October, and far below last year.
Middle‑income households
- October: $847
- November: $842
- November 2024: $839
  → Essentially flat. ^[11]

This pattern matches what other surveys and bank data describe as a “K‑shaped” economy: higher‑income households are still spending robustly, while lower‑income families — who feel the bite of higher prices, tariffs and borrowing costs more acutely — are pulling back hardest. ^[12]

People say nothing has changed — even as budgets shrink

Here’s the psychological twist Gallup highlights: despite that historic $229 drop in the dollar amount they expect to spend…

Only 29% of Americans say they plan to spend less on gifts than last year.
14% say they will spend more.
A 53% majority say they’ll spend about the same. ^[13]

In 2008, by contrast, nearly half told Gallup they would spend less. The 2025 numbers suggest many households are trimming plans in practice — hunting for cheaper gifts, shopping sales earlier, or leaning on “buy now, pay later” — without fully acknowledging it when asked. ^[14]

Gallup’s poll has a margin of error of ±3 percentage points for opinion questions and ±$68 on the spending estimate, so the precise dollar figure could be somewhat higher or lower. But the direction of travel is unmistakable. ^[15]

Other Confidence Gauges Point the Same Way

Gallup’s results don’t exist in a vacuum. Other major sentiment indicators are flashing similar warning signs.

Conference Board Consumer Confidence

The Conference Board’s Consumer Confidence Index:

Fell 6.8 points in November to 88.7, from 95.5 in October.
That’s its lowest level since April and the second‑weakest reading of 2025. ^[16]

The drop reflects:

A weaker Present Situation Index, as people turn more negative on business conditions and the labor market.
An even sharper decline in the Expectations Index, which captures views of income, jobs and business conditions over the next six months. ^[17]

University of Michigan Consumer Sentiment

The University of Michigan’s well‑watched Index of Consumer Sentiment:

Dropped to 51.0 in November, down from 53.6 in October and dramatically below last November’s 71.8.
Preliminary December data show a modest rebound to 53.3, but that’s still roughly 28% lower than a year earlier. ^[18]

Survey director Joanne Hsu notes that while inflation expectations are easing a bit, Americans remain deeply pessimistic about their overall financial situation and the impact of elevated tariffs and prices. ^[19]

In other words, Gallup, the Conference Board and Michigan all tell the same story: Americans are nervous, especially about the future.

“Picky but Still Spending”: What the FT and Hard Data Say

The Financial Times’ Unhedged newsletter, in a paywalled piece titled “Checking in on the US consumer”, frames the moment this way: the American consumer looks “unimpressive but stable” — more selective and value‑conscious rather than outright tapped out. ^[20]

Recent data back that up:

September retail sales grew only about 0.2% in nominal terms, implying a slight decline after inflation, and core retail sales (excluding cars, gas and building materials) slipped for the first time in months. ^[21]
Black Friday 2025 looked much more upbeat: Mastercard SpendingPulse reports U.S. retail sales excluding autos were up 4.1% year‑over‑year, with e‑commerce sales surging 10.4% versus 2024. ^[22]
Bank of America’s aggregated card data shows total credit and debit card spending per household up 2.4% year‑over‑year in October, the strongest growth since early 2024, with services driving much of the gain. ^[23]

Retail earnings tell a similarly split story: discounters and off‑price chains are doing well, while home‑improvement retailers and other big‑ticket sellers are feeling the pinch from a weak housing market and high borrowing costs. ^[24]

Meanwhile, weekly jobless claims have fallen to around 191,000, the lowest level in more than three years, and credit card delinquencies, at roughly 2.98%, are actually down from mid‑2024. ^[25]

Put together, it looks less like a collapse in consumption and more like a re‑prioritization:

Households are trading down to cheaper brands.
Shoppers are waiting for deals and spreading out purchases using “buy now, pay later” services, which handled about $10.1 billion in online spending from early November through Cyber Monday, up 9% from last year. ^[26]
Spending is being concentrated among higher earners, with lower‑income consumers cutting back the most. ^[27]

Why Are Americans So Uneasy?

Several overlapping forces help explain why sentiment is so weak even as many people keep shopping.

1. The long federal shutdown

Gallup’s fieldwork overlapped with the final weeks of the longest federal government shutdown in U.S. history, which disrupted pay for federal workers and delayed benefit payments and key economic data. ^[28]

For millions of households, that meant:

Real worries about missed paychecks and government services.
Headlines about chaos in Washington and mounting political brinkmanship.

That uncertainty tends to hit confidence harder than any single data release.

2. Tariffs and higher prices for everyday goods

A new wave of tariffs has pushed up the cost of many holiday staples:

A Bankrate analysis finds 78% of holiday essentials cost more in 2025 than in 2024, with tariffs amplifying inflation in categories like food, decorations and gifts. ^[29]
The University of Michigan notes that while inflation expectations have eased somewhat, price levels remain uncomfortably high for many households. ^[30]

Even if wage growth has kept overall incomes afloat, facing higher prices on everything from groceries to shipping makes people feel poorer.

3. High rates and wobbly job signals

The Federal Reserve has already cut interest rates twice this year and is widely expected to cut again at its December 9–10 meeting, responding to a rising unemployment rate (around 4.4%) and signs of slowing job growth. ^[31]

Yet borrowing costs remain high compared with the pre‑pandemic era:

Mortgage and auto‑loan rates are still elevated.
Household debt has reached a record $18.6 trillion, with credit card balances over $1.2 trillion, intensifying anxiety about carrying debt into 2026. ^[32]

Alternate data show private payrolls unexpectedly declined in November, and some sectors, like leisure, retail, and manufacturing, are starting to shed jobs — enough to make people nervous without yet triggering a spike in layoffs. ^[33]

4. A two‑track consumer

Banks and credit‑rating agencies describe a split picture:

Executives at Citizens Financial Group told the Reuters NEXT conference they see no broad “macro” stress on consumers, though near‑prime and subprime borrowers are under clear strain. ^[34]
Fitch Ratings and other analysts warn of rising credit risk among lower‑income households, whose savings buffers from the pandemic are largely gone. ^[35]

That aligns neatly with Gallup’s finding that lower‑income shoppers have slashed holiday budgets by roughly 40%, while higher‑income households are pulling back much more modestly — yet still enough to drag national averages lower. ^[36]

What It Means for the Fed, Retailers and 2026

For the Federal Reserve

The Gallup data adds pressure on a Fed already juggling:

Stubbornly above‑target inflation,
A cooling but not collapsing labor market, and
Sentiment indicators that look recession‑like. ^[37]

Economic pessimism doesn’t automatically force the Fed’s hand, but persistent low confidence can translate into slower spending and hiring. That’s one reason markets are betting heavily on another quarter‑point rate cut this week, with more possible easing in early 2026. ^[38]

For retailers and brands

For businesses catering to U.S. consumers, November’s confidence slump and Gallup’s record‑size cut in holiday budgets send a clear message:

Promotions and discounting will likely remain crucial to moving merchandise.
Value positioning — store brands, smaller packs, bundle deals — is winning out over premium tiers for many shoppers.
The BNPL boom and strong online growth show that flexible payment options and digital convenience are now core expectations, not niche perks. ^[39]

Retailers that can appeal both to cash‑strapped lower‑income shoppers and resilient high‑income households — for example, by offering a wide value ladder within the same brand — are best positioned to navigate the uncertainty.

For politics and policy

Gallup points out that chronically low economic confidence has weighed on President Trump’s job approval ratings throughout his second term, even as headline growth has at times looked solid. ^[40]

With another budget fight likely in 2026 and tariffs still controversial, policymakers in both parties face a simple reality: voters may keep spending, but they don’t feel good about it.

What to Watch Next

As of December 7, 2025, here are the key developments to watch in the weeks ahead:

The Fed meeting (Dec. 9–10)
- How aggressively does the Fed cut rates, and what does it signal about future moves? ^[41]
Official November jobs report (due Dec. 16)
- If the delayed data confirm rising unemployment and soft payrolls, confidence could fall further. ^[42]
Final holiday sales tallies
- Early readings show strong Black Friday and Cyber Monday results, but the full season will reveal whether Gallup’s historic cut in planned spending translates into weaker overall sales — or whether deals, BNPL and high‑income shoppers offset it. ^[43]
New sentiment readings in January 2026
- The Conference Board and Michigan will publish updated confidence data after the holidays. If confidence stabilizes or improves, November may look like a temporary scare; if not, the risk of a broader slowdown grows. ^[44]

For now, the message from Gallup, The Hill, the FT and a wide array of economic data is consistent: Americans are uneasy, careful and increasingly deal‑obsessed — but not ready to slam their wallets shut. The 2025 holiday season could end up being remembered less for a collapse in spending and more for a turning point in how Americans spend.