Structured Analytical Report: 2025 Holiday Spending Strain Analysis

Two Bank of America (BofA) reports warn of tighter 2025 holiday spending due to inflation and new tariffs, leading consumers to adjust gift-giving behaviors (e.g., shifting to discounts, scaling back lists). While nominal holiday spending is projected to reach $1 trillion (per National Retail Federation), real inflation-adjusted spending may remain flat or decline. Tariffs are estimated to add $132 per shopper, impacting electronics and jewelry most. Market data shows the Consumer Cyclical sector (linked to discretionary spending) underperformed on November 27, reflecting these concerns.

a. BofA survey (2,000+ respondents): 62% expect financial strain from holiday expenses; 58% perceive gifts as more expensive [1].
b. Tariff impact: Electronics spending per transaction rose ~8% post-spring tariffs; jewelry spending up ~4% after August tariffs [1].
c. Income-based split: High earners’ spending increased ~3% YoY vs <1% for lower-income households; wage growth:4% (high) vs ~1% (low) [1].
d. Nominal vs real spending: National Retail Federation predicts $1 trillion holiday season (4% YoY growth), but real inflation-adjusted spending may be flat/down [2].
e. Tariff economic impact: LendingTree estimates total $40.6 billion added cost; average shopper pays $132 more [4].
f. Sector performance: Consumer Cyclical sector (discretionary spending) declined 0.07% on November27 [0].

The BofA reports highlight a growing divide in consumer spending power: high-income households (stronger wage growth) continue to spend, while lower-income households face strain [1]. This split is exacerbated by tariffs, which pushed up prices for popular gift categories like electronics and jewelry—discretionary categories most sensitive to cost increases [1,3]. The Harvard Business School Pricing Lab found tariffs added ~5% to consumer goods prices [3], aligning with BofA’s card data showing 6% higher per-household spending but lower transaction volumes (consumers pay more for fewer items) [1].

The National Retail Federation’s $1 trillion nominal projection masks underlying weakness: ASU economist Lee McPheters notes real spending (adjusted for inflation) may not grow, as inflation (2.7% in June) and tariffs erode purchasing power [2]. This is reflected in market sentiment: the Consumer Cyclical sector (retail/apparel) underperformed on November27 [0], indicating investor concern about discretionary spending during the holiday season.

Consumers are adapting by shifting to discount stores (87% of strained shoppers), using cheaper “dupes” of luxury items (51%), and scaling back gift lists (38% limit to immediate family) [1]. These behaviors suggest value-focused retailers may outperform premium brands in electronics/jewelry.

a.

: Lower-income households face the biggest squeeze—tariffs add $132 per shopper, and wage growth lags inflation [1,4]. This may lead to increased debt or reduced non-holiday spending post-season.
b. : Premium brands (electronics/jewelry) and discretionary retailers may see lower sales volumes; discount chains could gain market share [1,3].
c. : Flat real holiday spending signals potential weakening consumer demand beyond the season, especially if labor market softening (warned by Goldman Sachs) continues [1].
d. : Consumer Cyclical sector underperformance (November27) reflects investor concern about discretionary spending [0]. Energy (up1.77%) outperformed, unrelated to holiday trends.

• Context
  : 2025 holiday season occurs amid post-pandemic inflation and new tariffs (spring/august 2025).
• Critical Data
  : Tariffs add ~5% to consumer goods prices [3]; LendingTree’s $40.6B total tariff impact [4]; BofA’s income split in spending [1].
• Risk Alert
  : Labor market softening (tech/manufacturing sectors) could further squeeze lower-income households [1].
• Notable Trend
  : Shift to “dupes” (cheaper luxury imitations) indicates changing preferences for value over brand [1].

a. Exact November2025 inflation rate (latest data: June’s2.7% [1]).
b. Performance of individual retailers (e.g., Amazon, Walmart) during Black Friday weekend.
c. Regional variations in tariff impact (urban vs rural, coastal vs inland).
d. Long-term impact of 2025 holiday trends on consumer debt levels.

[0] Ginlix Analytical Database (get_sector_performance tool), 2025-11-27.
[1] Business Insider, “Shoppers brace for a tighter holiday season as gift prices keep climbing: BofA survey,” Reed Alexander,2025-11-27. URL: https://www.businessinsider.com/consumers-are-feel-spending-strain-holiday-gifting-season-inflation-tarrifs-2025-11.
[2] ASU News, “ASU expert says holiday shopping season could top $1 trillion despite economic headwinds,” Marshall Terrill,2025-11-24. URL: https://news.asu.edu/20251124-business-and-entrepreneurship-asu-expert-says-holiday-shopping-season-could-top-1-trillion.
[3] Wealth Enhancement Group Blog, "How Tariffs Will Impact Holiday Shopping,"2025. URL: https://www.wealthenhancement.com/blog/how-tariffs-will-impact-holiday-shopping.
[4] CNBC, "Trump tariffs add $40 billion to holiday costs, Lending Tree says,"2025-11-02. URL: https://www.cnbc.com/2025/11/02/trump-trade-holiday-shopping-lending-tree-tariffs.html.

Note: All data is accurate as of November27,2025.
Disclaimer: This report is for informational purposes only and not investment advice.