For the first time since 2021, TransUnion, the information and insights company, has recorded that 27 per cent of US consumers are now pessimistic about their household finances over the next 12 months.
In its Q2 2025 Consumer Pulse study, which surveyed 2,998 American adults between 1 – 12 May 2025, TransUnion revealed that tariffs and the potential rise of cost of goods have played huge roles in impacting consumer outlooks on their financial situations. In Q4 2024, 21 per cent were pessimistic, while earlier in the year (Q2 2024), 23 per cent had negative views.
While there is a silver lining in the findings, with 55 per cent of consumers stating they are optimistic about household finances over the next 12 months, the same percentage as in Q2 2024, there has been a drop in optimism since Q4 2024 (58 per cent).
TransUnion broke down the findings by age group and found that the youngest consumers surveyed – Gen Z and Millennials – remained most optimistic about future finances, at 67 per cent and 64 per cent, respectively.
“Since early April, there has been a marked increase in the level of uncertainty about future costs primarily due to the ongoing discussions about tariffs,” said Charlie Wise, senior vice president and head of global research and consulting at TransUnion. “While we’ve seen a rise in pessimism about future finances, it can’t be overstated that the same percentage of Americans are as optimistic about their future finances today as they were at this same time last year.
“We posit this is happening because of the continued strong employment picture and sustained wage gains. If you have a job and feel like you’re likely to get some form of pay increase over the next year, then you also will likely be able to manage through most possible scenarios for increases in the costs of goods and services.”
Comparing optimism and pessimism levels in the last year by generation; tariff impacts
| Generation/Insights
|
Percent of consumers optimistic about their household finances in the next 12 months | Percent of consumers pessimistic about their household finances in the next 12 months | Percent of consumers who say higher prices of products resulting from tariffs will impact them personally | ||||
|
Timeframe |
Q2
2024 |
Q4 2024 | Q2
2025 |
Q2
2024 |
Q4 2024 | Q2 2025 | Q2 2025* |
|
Overall |
55% | 58% | 55% | 23% | 21% | 27% |
67% |
|
Gen Z |
66% |
64% |
67% |
14% |
18% |
17% |
55% |
|
Millennials |
62% | 66% | 64% | 21% | 17% | 21% |
59% |
|
Gen X |
47% |
53% |
52% |
28% |
23% |
29% |
70% |
|
Baby Boomers |
49% | 49% | 43% | 26% | 24% | 36% |
77% |
Tariff concerns
Nearly nine in 10 Americans (87 per cent) reported some level of concern about the impact of current or possible tariffs on their household finances; 41 per cent said they were very concerned. To that end, the Consumer Pulse study found that consumers now have an increasing interest in securing credit products.
Of those consumers who were very concerned about tariffs, 37 per cent planned to apply for new credit or refinance existing credit in the next year, a higher rate than all others (30 per cent) who planned the same. Liquidity credit products which provide access to cash, including credit cards and personal loans, appeared to be a greater preference for those who are tariff-concerned.
Specifically, this group is interested in increasing available credit on existing credit cards, applying for a personal loan and using buy now, pay later payment services.
“When there is uncertainty in the market, this often results in consumers seeking new credit to ensure they are prepared for any future financial hurdles. While it’s not clear just how much of an impact tariffs will have on consumer wallets, it is clear that those consumers who are most concerned about them are more likely to be preparing for the future through myriad credit options,” said Wise.
Fear of recession
While inflation continues to be the top financial concern of Americans – 81 per cent ranked it as a top three concern in the next 12 months – there was a pronounced increase in fears of a recession. This metric jumped seven percentage points from Q2 2024 with 52 per cent saying it was in their top three financial concerns over the next 12 months — its highest level in two years. In Q4 2024, fears of a recession stood at 43 per cent.
While recession anxieties are growing, Americans were even more worried two years ago, when 53 per cent of respondents rated it as one of their top three concerns. At that time, 75 per cent of Q2 2023 Consumer Pulse study respondents said they believed the country would be in a recession by the end of 2023.
In comparison, 72 per cent of this quarter’s respondents believe there will be a recession by the end of 2025. No recession ever occurred in 2023 or has over the ensuing two years, according to the U.S. Bureau of Economic Analysis.
“Fears of a recession should never be discounted. However, history has a way of repeating itself. To this end, consumers are being pragmatic and considering the news of the day. As tariff discussions bring uncertainty, so do increased fears of economic setbacks. Yet, just like we saw in the second quarter of 2023, there are a lot of positives about the economy and the consumer credit market at-large. One thing is certain – we should expect to see more shifts in consumer sentiment in the coming months,” concluded Wise.
