Holiday spending expected to hold steady as high gas prices weigh on consumer sentiment

Consumers plan to spend a little less this holiday season than last year as higher gas prices and the overall cost of living take a toll on their personal finances.

A new survey from PwC anticipates that the average amount Americans plan to spend on gifts will decline by about 2% to $708 this holiday season, down from $721 in 2025. The survey, which ran from June 15 to June 26, indicated consumers remain largely resilient despite deteriorating consumer sentiment.

"They continue to spend, despite high gas prices and the lowest sentiment we've ever seen, so it doesn't surprise us that that's going to carry through the holiday season," Ali Furman, PwC US consumer markets industry leader, told Yahoo Finance. "It's just a continuation of the trends."

In 2025, shoppers said they planned to spend about 11% less on gifts and ended up spending 6.5% more year over year. This year could bring a similar scenario, where Americans feel crummy about economic conditions but are willing to spend in certain areas.

Baby boomers said they expect to spend the same amount on gifts as last year, while millennials expect to spend 10% less. Millennials, who are now homeowners and young parents, still make up the largest share of spenders overall.

Consumer sentiment worsened for the first time in three months in August as gas prices above $4 per gallon weighed on Americans' wallets. August retail sales data is scheduled for release in mid-September, following a 0.6% decline in July.

"As you go through month by month in the last quarter, you can tell when fuel prices increased and got above $4, and perhaps there's a psychological impact to that," Walmart CFO John David Rainey said on a call with investors. "It's why we have leaned so heavily into lower prices."

There are reasons to expect spending could still hold up, however. Wells Fargo analyst Jennifer Timmerman believes the "no hire, no fire" labor market can underpin consumer strength throughout the rest of the year.

"Overall, the consumer is employed, they're showing strong wage growth, and that allows them to be current on their obligations," Michael Linford, the COO of buy now, pay later company Affirm, told Yahoo Finance in August. Linford added that Affirm's consumers are in a "quite good" state with "pretty stable credit trends."

Consumers are prioritizing analog items, such as toys and screen-free activities, as their top gifts for kids this holiday season.

In what the toy industry calls "cozy culture," families are choosing tech-free, low-stimulation items like collectibles, puzzles, crafts, and board games for their kids and themselves to offset digital exposure.