By Becca Coggins, Christina Adams, and Kari Alldredge
In the first quarter of 2025, US consumers reported feeling nearly as optimistic as they did at the end of the previous year. This optimism was buoyed by a robust economy with low unemployment, steady job growth, and stable inflation. However, for US consumers across income groups and generations, spending intentions were down across several discretionary categories. Unlike in early 2024 (when consumers carried their approach to holiday spending into the new year), consumers this year reverted to their typical approach to new-year spending.
The following five charts showcase findings from our latest ConsumerWise survey.
Overall, I’m planning to spend less simply because prices of basic needs like utilities, eggs, food in general, and fresh items have increased. So I’ll probably spend a little less on apparel and other things like shoes, and maybe less on vacations, than I have in the past.
Female, baby boomer
We spent a lot last year . . . so now we’re buying actual necessities and looking for good deals. We want to be intentional with our money and ensure that our money goes as far as it can possibly go. We need to be able to afford to live in the current economy, which doesn’t seem to be changing. So we need to do our best to tighten our belts.
Female, millennial
We don’t spend a lot of money on other types of entertainment at home, but we enjoy luxury travel at high-end resorts. We use airline and credit card points, so we try to get the most out of our travel. I’m worried about inflation and everyday things costing more, but right now, I don’t think it’s going to affect how we travel.
Male, Gen X
Optimism might have been the prevailing feeling among US consumers in the first quarter of the year, but spending intentions across demographic groups nevertheless remained mixed. These shifts underscored different priorities across age groups and income levels. As economic data continues to fluctuate—for instance, inflation rose above economists’ expectations in January—consumer players should keep a close eye on whether consumer sentiment and behavior align once again. To contact us for more information or to read additional insights, check out our ConsumerWise page.
To see previous ConsumerWise insights, visit our page of 2024 research.
ABOUT THE AUTHOR(S)
Becca Coggins is a senior partner in McKinsey’s Chicago office, Christina Adams is a partner in the Dallas office, and Kari Alldredge is a partner in the Minneapolis office.
The authors wish to thank Andrea Leon, Andrew Pitakos, Braj Bhadauria, Christina Anderson, Christina Sexauer, Eitan Urkowitz, and Tom Skiles for their contributions to this article.
This article was edited by Alexandra Mondalek, an editor in the New York office.
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