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When it comes to the holiday season, it’s full of cheer, family time, and gift ideas. In recent years, though, the holidays have been a little tougher to enjoy for most Americans. Financial hardships and economic uncertainty skyrocketed during the COVID-19 pandemic and have slowly crept down, but still remain a looming threat to many.
In fact, according to the Equifax Market Pulse Index (MPI), the average American is in a worse financial position in 2025 than they were in 2021. So, what can we glean from the MPI, and what exactly is the Market Pulse Index based on?
Let’s explore holiday shopping retail trends below.
What the Holiday Season Spending Looks Like
The MPI tries to blend first-hand, in-the-moment statistics and forecasts of future economic conditions. For example, a common measure of first-hand statistics for consumers is the amount of debt a consumer has and their most recent credit history.
The MPI then contrasts this with a consumer’s assets, like income and savings. On the other hand, the more speculative trends can be something like how a consumer will be able to meet unexpected debt obligations, wealth volatility, and how student loans can impact consumers as a whole.
By aggregating this data, they recently estimated that the average US consumer has an MPI score of 61.4, which is around 0.6 lower than 4 years ago. However, this disparity can be quite lopsided for certain generations.
Generation X only saw a 0.4 score decrease, while Baby Boomers actually saw a 0.5 score increase. On the younger end of the scale, Millennials have a score decrease of 1.1, while Generation Z saw a staggering 3.3 drop. One reason that may cause this disproportionate decrease is the growing concern of financial delinquency.
On average, delinquency is more prevalent and more impactful for younger generations. Moreover, the number of ‘severe’ delinquencies by younger generations is outpacing the lessening number of delinquencies by older generations. Numerically, young city families and young singles saw an increase in severe delinquencies of 10% and 4%.
On the other end of the scale, suburban families and singles saw a decrease of 2% and 7% respectively. This means that not only is the US population finding it harder and harder to keep up with payments, but the younger generations are starting to fall behind their older counterparts.
Wealth By Generation
Another indicator of weak financial status in younger generations is the actual proportion of wealth. Millennials and Gen Z hold a combined 28% of the total US savings dollars and 17% of the total US invested assets. While this alone can be quite staggering for financial longevity for younger consumers, it doesn’t end there.
Around 5% of Gen Z are considered ‘affluent’, where they are younger than 29 and hold over $1,000,000 in assets. This affluent 5% owns a jaw-dropping 63% of all of Gen Z’s wealth. Within this differential, the affluent Gen Z hold twice as many assets as the remaining 95%. In turn, many Gen Z consumers have turned to credit cards to help make ends meet.
In fact, nearly 20 million credit card accounts have been opened since 2021. So, with these existing financial hardships, what can retailers expect during the holiday season? Naturally, less discretionary income means less overall spending during the holidays.
Statistically, it is estimated that disposable income is at its lowest since 2009. However, things like family gifts and children’s gifts are most commonly considered ‘non-negotiable’ during the holidays. One way some consumers are managing to make these gifts more affordable is with the help of Buy Now, Pay Later (BNPL) services.
With BNPL, they can easily disperse holiday expenses into easy installments. It is estimated that 67% of parents intend to use these services during the holidays, and 43% of consumers say BNPL is a determining factor for where they shop.
Last Talk
This variety of factors can make just about anybody’s head spin. If you want to make sure your business is properly prepared this holiday season, companies like Equifax are able to provide guidance to any type of business. With the help of Equifax advisors, you can better analyze how your target demographic will be affected by market conditions and how you can get your demographic involved this holiday season.
Best of all, you can get this information in whichever way you prefer. They offer virtual webinars for a broader overview of the markets or a complimentary advisory session for those looking for deeper insights. Ultimately, if you want to make the most of this holiday season, getting advice from Equifax’s advisors is one of the best ways to go.
Source: Equifax
