As the final quarter of 2025 takes shape, marketers face a paradox: Consumer spending appears resilient, yet caution is everywhere. Inflation is proving sticky. Tariffs are driving up costs. And confidence in the economy is slipping.
Still, the holiday season—one of the most critical revenue periods of the year for many brands—is underway, and will offer a real-time read of where demand is holding and where it’s softening. It’s an ideal time to focus less on what consumers say they’ll do and more on what they’re actually doing, a distinction that will be increasingly important heading into 2026.
While this mix of signals can make planning feel uncertain, it also offers valuable insight into what’s ahead. The trends taking shape now will help set the tone for 2026. While no forecast is perfect, paying attention to a few key indicators can help marketing leaders cut through the noise, anticipate shifts in consumer behavior, and refine how they allocate budgets as they look to the new year.
Inflation may have cooled from its 2022 highs, but it has remained persistent throughout 2025. Prices continue to hover around 3.0% higher year-over-year (YoY), and new tariffs are adding another layer of pressure—raising the cost of both consumer goods and the equipment businesses rely on. Many companies are passing those price increases along to consumers, eroding purchasing power and testing price tolerance across income groups.
Because many of the new tariffs only took effect in the past few months, their full impact has yet to be felt. As these costs work their way through supply chains, pricing pressures will likely intensify in 2026.
For brands and marketers, this means price sensitivity isn’t likely to fade anytime soon. “Consumers are spending more carefully,” says Kelly Boyle, SVP of Strategic Business Outcomes at Basis. “However, that doesn’t always mean less. They’re asking whether what they’re paying for is really worth it and focusing on quality and value.”
Keeping an eye on monthly inflation reports, developments around tariff impacts, and how competitors adjust pricing can help teams understand where consumer budgets are tightening and which audiences are feeling pressure first. Those insights can reveal where to adjust messaging around value, quality, and necessity as consumer priorities continue to shift.
Consumer confidence has remained weak throughout 2025. The Consumer Confidence Index has stayed below the 80-point threshold that often signals recession risk since February, and it declined again in September. The University of Michigan’s Index of Consumer Sentiment shows a similar pattern: It held nearly flat at 55.0 in October 2025 (vs. 55.1 in September), down 22% YoY, while consumer expectations fell more than 30% during that period.
Despite confidence slipping, spending hasn’t yet followed suit. “A lot of research shows consumers saying they’re going to spend less, but we’re not actually seeing spending go down yet,” says Boyle. “People might plan to spend less, but when they see the product, the price, or the deal in front of them, that’s when the real decision happens.”
For marketers, that means these dips in confidence are important to track, but not always predictive. Watching real behavior—like changing shopping cart sizes, shifting web traffic patterns, or slowing engagement—can give marketers a truer picture of demand. In many cases, confidence data reflects emotion more than genuine intent, so interpreting it alongside behavioral evidence can reveal whether concern is translating into real restraint.
Despite declines in confidence, consumer spending has stayed strong through 2025. However, that foundation is starting to shift. Recent data shows that growth is increasingly driven by higher-income households, while job openings are decreasing and hiring is slowing. The number of people voluntarily quitting jobs has fallen to its lowest level since December, a clear sign that confidence in finding new opportunities is waning.
Younger consumers are feeling the strain most. Gen Z spending fell 13% between January and April of this year, and Zoomers plan to cut 2025 holiday purchases by 23%. Unemployment among new entrants to the workforce—many of them Gen Z—remains elevated, and more than 40% report running out of money each month. Taken together, the slowdown in hiring and Gen Z’s spending pullback point to a growing generational divide in consumer resilience. Boyle notes that brands should dig deeper into what’s driving those shifts rather than assume every cutback signals disengagement. Understanding whether younger shoppers are trading down, delaying purchases, shopping secondhand, or spending on experiences versus products can reveal where opportunity still exists.
Tracking labor trends by income and age throughout Q4 can help marketers anticipate where confidence, and eventually spending, may weaken first. If employment continues to cool, discretionary categories and younger shoppers are likely to feel it soonest.
Economic uncertainty often drives caution. Earlier this year, 94% of US advertisers expressed concern around the impact of tariffs, and 45% said they planned to reduce their budgets as a result. Those adjustments are now starting to surface as the effects of tariffs flow through supply chains and margins tighten.
But history shows that brands that maintain visibility during downturns tend to emerge stronger. Monitoring competitors’ share of voice and promotional activity through Q4 can help marketing leaders spot where attention is up for grabs. Discovering opportunities to leverage relative advantage—investing in audiences, channels, and timing where competitors leave space—can help teams stretch budgets while gaining ground.
At the same time, Boyle notes, “If competitors start pulling back, a brand’s share of voice naturally increases—even without upping spend. That’s often when it’s worth holding your ground or leaning in a bit more if the timing is right.”
Continuing to invest strategically during periods of retreat not only preserves awareness but also builds momentum that compounds once conditions improve. Marketers who stay alert to these shifts can shape their 2026 plans with clearer visibility and stronger positioning.
Each of these indicators can guide practical planning for 2026. Keeping a close eye on rising prices, shifting consumer sentiment and behaviors, changes in the relationship between spending and the job market, and evolving competitor strategies will help leaders navigate the market more effectively. By paying attention to these signals throughout Q4, teams can refine priorities for the year ahead based on consumer and competitor behavior. Treating these signals as ongoing inputs—rather than one-time data points—will help ensure plans are crafted as strategically as possible.
“When things feel uncertain, the best thing you can do is stay clear on your strategy and your audience,” says Boyle. “The teams that succeed amidst turbulence are those who stay focused on what matters most to their business.”
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Looking for more insights on how marketing leaders can navigate economic uncertainty? Basis’ CMO Katie McAdams shares her expertise in How Marketing Leaders Can Earn Executive Buy-In During Economic Turbulence.
