11:54 AM EDT, 09/03/2025 (MT Newswires) -- US consumers are looking to scale back holiday purchases this year due to higher prices, with Gen Z shoppers leading the planned pullback, PwC said in a report published on Wednesday.

Holiday spending is expected to decline by 5% annually to $1,552 on average, according to the consulting firms' 2025 holiday outlook survey. That's "the first noteworthy dip" since the pandemic began in 2020, PwC said.

Gen Z shoppers, or those who are 17 to 28 years old, intend to cut their holiday spending by nearly a quarter, according to the report.

"Gen Z respondents -- many dealing with major life transitions and early careers in a tough job market, often without much in savings -- say they expect to reduce their holiday budgets by 23%, more than any other generation," PwC said. "That means retailers could be fighting harder for a smaller pool of Gen Z's discretionary dollars this season."

In contrast, the so-called millennials, Gen X and baby boomers are looking to maintain or even increase their holiday spending.

In general, 84% of all respondents said they expect to cut their spending over the next six months, according to the survey.

"During the holiday season, specifically, 53% say that general price increases will likely affect their spending decisions this year," PwC said. "People are going to keep shopping, but with continuing concerns about tariffs and elevated prices, value-conscious choices are likely to define the season."

PwC, however, said that the survey results captured the mood in June, when there was more uncertainty around tariffs. "Economic signals continue to shift and, between now and December, purchasing behavior could evolve in response," it said.

US President Donald Trump said on Tuesday that he will seek an "expedited ruling" from the US Supreme Court to reverse a decision by an appeals court that found most of his global tariffs illegal, CNBC reported.

Government data on Friday showed consumer spending in the world's biggest economy rose in July at the fastest pace since March, while the Federal Reserve's preferred inflation metric, which excludes food and energy, increased annually to the highest level in five months.

Also on Friday, final survey results from the University of Michigan showed US consumer sentiment fell in August amid concerns over the economy's health, while inflation expectations rebounded.

The Federal Reserve is widely expected to cut interest rates this month. Chair Jerome Powell indicated in August a potential monetary policy pivot, saying that downside risks to employment were rising while the effects of tariffs on inflation will likely be short lived.