Job Market Strains Push Holiday Spending Toward eCommerce

Confidence drives consumer spending, and the health of the labor market underpins how secure households feel about loosening their wallets. As fall begins, the latest survey data shows consumers growing more cautious about both jobs and the economy, signaling potential headwinds for discretionary categories such as travel — even as other forms of spending may benefit.

The Conference Board reported Tuesday (Sept. 30) that the Consumer Confidence Index fell for the second consecutive month in September, declining 3.6 points to 94.2, from 97.8 in August.

“The Present Situation Index dropped sharply by 7.0 points to 125.4,” the release noted, marking its steepest monthly decline in a year. Expectations also weakened modestly, with the index slipping to 73.4 — a level that “remains below the threshold of 80 that historically signals recession risk .”

Concerns about the labor market were front and center. Only 26.9% of consumers said jobs were “plentiful,” down from 30.2% in August, the ninth consecutive monthly decline.

That sentiment is supported by the latest Job Openings and Labor Turnover Survey (JOLTS), which also was released on Tuesday. Job openings stood at 7.2 million in August, essentially flat from the prior month but down more than 400,000 from a year earlier. With 7.3 million unemployed individuals in the U.S., the openings-to-unemployed ratio remained below 1, less than one job per unemployed worker, for the second straight month.

Hiring overall slowed, with the private sector cutting 113,000 positions.

Taken together, these numbers suggest that households are registering the shift from a labor market of abundance to one where jobs are harder to come by. That shift is translating into caution at the checkout counter.

The September confidence survey showed that “consumers’ assessments of their current family finances recorded the largest one-month drop since this measure began in 2022.”

More respondents reported that a recession is either likely or already underway. Inflation remained the top concern in consumer write-ins, though expectations for price increases eased modestly to 5.8% over the next 12 months, from 6.1% in August.

The biggest potential casualty of waning confidence is travel. “Intentions deteriorated broadly, particularly for travel,” the Conference Board noted. Vacation plans fell for the second consecutive month, both domestically and abroad, with international travel driving the decline. Current intentions now stand at their lowest level since April.  

That pullback reflects how quickly households are reevaluating discretionary categories when job security is less certain. With fewer families confident enough to commit to trips, the travel industry faces a softer end to 2025 than may have been anticipated.

Pullbacks in leisure spending may ripple across sectors tied to travel, from airlines to hospitality. But the confidence data also hints at a compensating shift.

Consumers who forgo trips may turn instead to eCommerce, purchasing gifts to maintain ties with loved ones they will not visit in person. And in addition, the September survey showed that intentions for several big-ticket household items improved, with televisions and dryers seeing stronger demand. That points to households redirecting discretionary dollars toward goods for the home.

As the holiday season approaches, this diversion of travel budgets to digital shopping may be amplified. Families opting out of vacations are likely to lean more heavily on eCommerce for holiday gifting, both to stretch budgets and to maintain social connections despite distance. Retailers, already preparing promotions, can expect consumers to favor online deals and digital convenience over discretionary travel packages.

Looking ahead, retail sales trends in the final quarter of the year may reflect this substitution. Categories tied to travel and experiences could see reduced momentum, while eCommerce and gift purchases capture a larger share of holiday activity. The balance between tighter labor market conditions and consumers’ desire to celebrate — even if in smaller, digital-first ways — will set the tone for how robust the season ultimately proves.

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