Economic Confidence Index (ECI) Drops:: Gallup's ECI fell to -30 in November 2025, the lowest in 17 months. This reflects worsening views on current economic conditions and future prospects. Why this matters: Lower economic confidence can lead to decreased consumer spending and slower economic growth.
Labor Market Optimism Erodes:: Only 33% of Americans believe it is a good time to find a quality job, down eight points from August and the most negative since January 2021. Why this matters: A pessimistic view of the job market can further dampen consumer sentiment and spending.
Holiday Spending Budgets Contract:: Consumers estimate spending an average of $778 on holiday gifts, a $229 decrease from October 2025 and below the $1,012 estimate from November 2024. Why this matters: Reduced holiday spending can negatively impact retailers and the overall economy during a critical sales period.
Spending Cuts Across Income Levels:: Both high- and low-income households have significantly reduced their intended holiday spending. High-income earners ($100,000+) plan to spend $1,230 (down from $1,479 in October), while low-income earners (under $50,000) plan to spend $384 (down from $651 in October). Why this matters: Broad-based spending cuts indicate a widespread concern about economic stability.
The decline in economic confidence and holiday spending can be attributed to several factors:
Federal Government Shutdown:: The shutdown, which ended on November 12, 2025, likely contributed to the dampened mood by delaying pay for federal workers and disrupting benefit programs.
Stock Market Volatility:: Uncertainty in the stock market can erode consumer confidence, particularly among higher-income households with investments.
Labor Market Concerns:: Despite stronger-than-expected employment growth, a slight rise in the unemployment rate to 4.4% has contributed to anxiety about job security.
While consumers are cutting back on spending, fewer Americans are explicitly saying they will spend less than last year. This suggests a cautious approach rather than outright panic. Retailers are hoping that the end of the government shutdown will help to restore consumer confidence and spending.
What is the Economic Confidence Index (ECI)?
The ECI is a measure of consumer confidence in the economy, based on Americans' ratings of current economic conditions and their perceptions of whether the economy is improving or worsening.
Why did holiday spending plans decrease in November 2025?
Several factors contributed, including concerns about the economy, job market uncertainty, and the impact of a federal government shutdown.
How are different income groups affected?
Both high- and low-income households have reduced their holiday spending plans, indicating a broad-based concern about economic stability.
Economic confidence has slipped, impacting consumer behavior.
Holiday spending is down across income levels, signaling caution.
External factors like government shutdowns and job market concerns play a significant role in consumer sentiment.
Monitor economic indicators and adjust spending accordingly.
Consider prioritizing essential spending and delaying non-essential purchases.
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