The holidays are looming, and Americans are getting ready for the gift-giving season. Holiday shopping is always a hectic time of year, and it is important for consumers, retailers, and lenders to prepare. Luckily, with the guidance of in-depth and multidimensional consumer finance data, it becomes easier to predict consumer behavior trends. Understanding these trends allows retailers and lenders to adapt and thrive.
2024 broke records for holiday spending, but that trend will not continue in 2025. Consumers are taking a much more cautious approach to holiday spending this year, either spending a similar amount as in 2024, or less.
There are several reasons for the decrease in holiday spending. Examining financial data can shed light on some of the factors. One important data point to consider is the Market Pulse Index. This index, designed by Equifax, leverages proprietary and deep data insights with trends. In doing so, it provides a comprehensive view of consumer finances and how they change over time.
Equifax measures an index value for the average US population, as well as for each generation in the United States. In 2025, the average US population has an index of 61.4, which is a decrease of its 2021 value of 62.
The older generations enjoy a higher index; Traditionalists have a value of 64.8 in 2025, and Baby Boomers have an index of 64.2. Like the average US population, the index for traditionalists has decreased since 2021, dropping from 65.1. However, Baby Boomers have experienced a rise in their Market Pulse Index, increasing from 63.7. Baby Boomers are the only generation in the United States to see the index increase since 2021.
Gen X sits in the middle of the road, dropping from 61.1 in 2021 to 60.7 in 2025. Millennials and Gen Z face the lowest indices. More specifically, Millennials dropped from 59.8 to 58.7, and Gen Z dropped 5%, going from 61.9 to 58.6. This is the largest decrease of any generation, suggesting increased financial strife for Gen Z.
To calculate the index, Equifax distills a wide array of variables. For instance, the index considers the ability to obtain and manage credit based on historic credit usage and performance. It also looks at debt and income, whether it be from employment, interest, investments or gifts.
Financial challenges such as increasing delinquencies, wealth and income volatility, student loan impacts and high savings could have resulted in the index decreasing in value. Additionally, middle-income households are experiencing tighter budgets; the cumulative change in cost of spending for necessities has increased by 31.6%, whereas the income change is only 22%.
Looking at assets also helps paint a picture of the financial landscape. The typical US consumer has seen a 12% decrease in their median total assets over the last three years. Baby Boomers and Traditionalists hold 44% of the country’s total assets, but make up only 34% of the US population. Gen X composes 28% of the population and holds 27% of the total assets. Gen Z and Millennials hold less assets: Millennials represent 23% of the population with 14% of the assets, and Gen Z makes up 5% of the population with 3% of the assets.
There is additional wealth inequality within generations. For example, 5% of Gen Z households control 63% of the generation’s wealth. In terms of assets, 5% of Gen Z controls $1.2 trillion, whereas the other 95% control $600 billion. The wealthiest 5% of Gen Z has $1.1 trillion in investments; the other 95% has $300 billion invested.
All of this data is vital for predicting consumer behavior. The statistics show that Americans are facing many financial challenges, particularly the younger generations. With this in mind, it makes sense that consumers are taking a cautious approach to the holidays. However, consumers are not cutting out spending entirely; rather, they are taking advantage of new methods to make holiday purchases easier on the wallet.
For example, many shoppers are making their holiday purchases earlier in the year. In fact, 80% of all planned holiday gift spending is anticipated to happen by the end of Cyber Monday. Another useful tactic is Buy Now, Pay Later. This has become a selling point for many consumers; 43% of consumers say that BNPL influences where they shop.
Another trend is an increased focus on personalization and data-driven marketing. Nowadays, 71% of consumers expect companies to offer personalized interactions. Doing so can be a huge boost to the company as well, as fast-growing companies drive 40% more revenue from personalization than those that are slower growing.
With the help of data and consumer behavior predictions, lenders and retailers can better prepare for the holiday season. Lenders should anticipate that the demand for higher card balances will continue as consumers use credit to offset inflation. Retailers should remember that less in savings means less spending money. Although consumers are being careful with purchases, they are still seeking out high-value items for their loved ones. Staying on top of trends is an important move in the chaotic holiday spending season.
