American consumers feel worse about the economy than they did a year ago — and are barely trimming their holiday gift budgets anyway. That contradiction sits at the heart of PwC’s Holiday Outlook 2026, based on a survey of 4,093 US consumers fielded in June and released this month.
Average gift spending is expected to dip just 2 percent this year to $708, from $721 last year, even as the University of Michigan’s consumer confidence index fell 18.5 percent year over year across the same period. Households with children remain the biggest spenders, planning $875 on average against $635 for households without children. PwC’s researchers note that consumers have a habit of under-forecasting their own generosity, with actual holiday spending in past years consistently landing above early intentions.
The adjustment is happening around the edges of the holiday rather than at its centre. Eight in ten consumers plan to adopt a budgeting strategy this season, 79 percent say deals and discounts influence when they shop, and roughly 40 percent of planned gift spending is expected to concentrate in the five days from Thanksgiving to Cyber Monday. Travel budgets take the clearest hit: four in ten consumers plan to travel, 17 percent remain undecided, and among those travelling, a third are skipping flights and 38 percent are trading down to budget or mid-range hotels.
One of the report’s more striking findings is a turn toward the tangible. Sixty-four percent of consumers say they are prioritising screen-free gifts this year, rising to 78 percent among Gen Z — the generation most often described as permanently online. PwC also found that more than half of Gen Z shoppers say they enjoy browsing in physical stores, complicating the assumption that younger consumers have abandoned shops entirely.
Artificial intelligence, meanwhile, is entering the shopping process without yet taking it over. PwC puts AI use in holiday shopping at 29 percent of consumers, with most still completing the purchase themselves elsewhere — a pattern other 2026 research confirms, with Accenture finding shoppers happy to use AI for deals and comparisons but reluctant to let it spend unsupervised.
For retailers, the message is precision rather than pessimism. The consumer PwC describes is protecting gifts, family meals and traditions while hunting for savings everywhere else — trading down on travel and hotels, timing purchases to promotions, and mixing physical browsing with AI-assisted research. On Friday, October 9, 2026, the holiday consumer is not retreating. They are rationing — and the rationing follows emotion, not just price.
