In 2025, many Americans are changing how they spend money because of higher prices, new tariffs on imported goods, and uncertainty about government policies. While people still spend on basic needs like food and cleaning supplies, they're cutting back on extras like going out to eat or taking trips. To save money, many families are combining shopping trips into fewer, bigger purchases. Younger generations, like Millennials and Gen Z, are also adjusting—starting their holiday shopping earlier and focusing on affordable, useful gifts instead of expensive or luxury items. These changes show how people are trying to be smarter with their money during tough economic times.

In late 2025, the U.S. economy is facing a tricky situation. Inflation—the general rise in prices—is staying higher than the Federal Reserve wants, even though they recently cut interest rates to help the economy. The Personal Consumption Expenditures (PCE) index, a key measure of inflation, went up to 2.7% in August, while core inflation held at 2.9%. Both numbers are well above the Federal Reserve’s goal of 2%. This shows that inflation is "sticky," meaning it's not going down easily. At the same time, the job market is showing signs of weakness, which is pushing the Fed to consider more rate cuts later this year. The challenge now is finding the right balance between keeping inflation under control and supporting the slowing economy.