Consumers braced for an increase in prices, according to Jefferies analysts' predictions
In August 2025, consumer sentiment shows a generally cautious outlook, particularly for Gen Z and Gen X, as economic pressures and rising living costs continue to shape spending habits.
According to recent reports, Gen Z sentiment has seen a significant decrease in spending due to higher living costs. Approximately 64% of Gen Z consumers have cut spending in the past year, with rising utility costs and food prices being key stressors. Despite this, occasional retail therapy remains a factor, potentially leading to a pullback later in the year as tariffs and costs impact budgets more fully.
On the other hand, Gen X consumers exhibit relatively stable but cautious spending patterns. They represent a group of stable, multi-category, loyal shoppers who consistently convert, indicating some stability in sentiment. However, only 47% of Gen X have increased their savings since the start of 2025, compared to higher percentages in younger generations, signaling some financial pressure or less aggressive saving behavior.
Overall consumer sentiment reflects financial caution driven by economic pressures. Many consumers are more selective in spending due to economic uncertainty, with 59% citing having less money to spend this year and 47% being more selective. However, there is still a portion planning to spend more during key shopping periods, motivated by economic concerns such as stocking up on essentials or taking advantage of deals before prices rise further.
The segments of personal finance and business conditions continue to be significant factors in the current economic landscape, showing improvement and being referred to as the "hope trade" by analysts. Despite a slight increase in consumer sentiment from July to early August, the overall outlook remains cautious.
Brands aiming to engage these groups must build trust, offer quality experiences, and provide clear value to earn spending in this environment. The current economic climate, characterised by rising costs and financial caution, is shaping consumers to prioritise savings, trade off expenses, and seek value in purchases.
As we approach the back-to-school season, spending patterns are becoming more important. Back-to-school spending in August is becoming more significant, according to analysts, as consumers prioritise essential purchases over discretionary spending.
In summary, consumer sentiment in August 2025 is mostly marked by a cautious or decreased spending outlook for Gen Z due to rising living costs and economic uncertainty, with some stability but restrained optimism in Gen X. Brands must adapt to this environment by offering value and building trust to engage these consumers.
Read also:
- Catastrophe at a U.S. Steel facility in Pennsylvania results in the loss of two lives. crucial details unveiled
- Manipulating Sympathy: Exploiting Victimhood for Personal Gain
- Auto Industry Updates: Geotab, C2A, Deloitte, NOVOSENSE, Soracom, and Panasonic in Focus
- Exploring Money-Making Opportunities in Digital Gaming Worlds
