Pessimism About Future Household Finances Rises, Yet Majority of U.S. Consumers Remain Optimistic

Rhea-AI Summary

TransUnion's Q2 2025 Consumer Pulse study reveals a complex financial sentiment landscape among U.S. consumers. The study shows household financial pessimism reached 27%, marking the highest level since tracking began in Q1 2021, up from 21% in Q4 2024 and 23% a year ago. Despite rising pessimism, overall optimism remains stable at 55% compared to Q2 2024, though down from 58% in Q4 2024. Younger generations show the highest optimism, with Gen Z at 67% and Millennials at 64%. The survey, conducted between May 1-12, 2025, among 2,998 American adults, indicates that ongoing tariff discussions since April have increased uncertainty about future costs. However, strong employment conditions and sustained wage gains continue to support consumer confidence.

Positive

• Consumer optimism remains stable at 55% year-over-year
• High optimism among younger generations with Gen Z at 67% and Millennials at 64%
• Strong employment conditions and sustained wage gains support consumer confidence

Negative

• Household financial pessimism reached 27%, highest since Q1 2021
• Pessimism increased by 6 percentage points from Q4 2024
• Overall optimism declined from 58% in Q4 2024 to 55%
• Increased uncertainty about future costs due to tariff discussions

Insights

Economic Analyst

Rising consumer pessimism about finances signals economic uncertainty, yet majority remain optimistic amid strong job market.

TransUnion's latest Consumer Pulse study reveals a concerning trend - consumer pessimism about household finances has reached 27%, its highest level since tracking began in 2021. This 6% jump from Q4 2024 represents growing anxiety likely stemming from tariff concerns and potential price increases.

What's particularly noteworthy is the bifurcation in consumer sentiment. Despite rising pessimism, 55% of consumers maintain optimism about their financial future - unchanged year-over-year but down from 58% in Q4 2024. This suggests a polarization of economic outlooks among Americans.

The generational divide provides crucial context: Gen Z (67% optimistic) and Millennials (64% optimistic) show substantially higher confidence than the overall population. This demographic pattern typically translates to continued robust spending in technology, experiences, and subscription services despite broader economic concerns.

TransUnion's analysis correctly identifies the counterbalancing forces at work: tariff concerns versus labor market strength. The persistent optimism among the majority reflects the extraordinary resilience of the U.S. job market, which continues to provide wage growth that offsets inflation concerns for many households. However, the rising pessimism could be an early indicator of shifting consumer behavior, potentially affecting discretionary spending and credit utilization patterns in coming quarters.

TransUnion’s Q2 2025 Consumer Pulse study also finds those consumers most concerned about tariffs are seeking credit at elevated rates

CHICAGO, June 18, 2025 (GLOBE NEWSWIRE) -- As tariffs and the potential for rising cost of goods have dominated the news cycle since early April, a new TransUnion (NYSE: TRU) Q2 2025 Consumer Pulse study found that 27% of U.S. consumers are now pessimistic about their household finances over the next 12 months. This marks a six-percentage point rise from Q4 2024 (21%) and a four-percentage point increase from a year ago (23%). It’s the highest level since TransUnion first began tracking this data point in Q1 2021.

Despite the rise in pessimism, 55% of consumers are optimistic about their household finances over the next 12 months – the same percentage as in Q2 2024. However, optimism has declined from 58% in Q4 2024. The youngest consumers surveyed – Gen Z and Millennials – remain most optimistic about future finances, at 67% and 64%, respectively. The findings are derived from a survey of 2,998 American adults between May 1-12, 2025.

“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%

*Q2 2025 is the first time this question was included in the Consumer Pulse study.

Impact of Tariff Concerns on Credit Market

Nearly nine in 10 Americans (87%) reported some level of concern about the impact of current or possible tariffs on their household finances; 41% 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% planned to apply for new credit or refinance existing credit in the next year, a higher rate than all others (30%) 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.

Recession Fears Return, But are Consumers Simply in ‘Rinse and Repeat’ Mode?

While inflation continues to be the top financial concern of Americans – 81% ranked it as a Top 3 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% saying it was in their Top 3 financial concerns over the next 12 months — its highest level in two years. In Q4 2024, fears of a recession stood at 43%.

While recession anxieties are growing, Americans were even more worried two years ago, when 53% of respondents rated it as one of their Top 3 concerns. At that time, 75% 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% 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.

For more information about the Consumer Pulse study, please click here.

About TransUnion (NYSE: TRU)

TransUnion is a global information and insights company with over 13,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good^® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world.

http://www.transunion.com/business

Contact Dave Blumberg

Email david.blumberg@transunion.com 

Telephone 312-972-6646

FAQ

What are the key findings of TransUnion's Q2 2025 Consumer Pulse study?

The study found that 27% of U.S. consumers are pessimistic about household finances, while 55% remain optimistic. Gen Z and Millennials show highest optimism at 67% and 64% respectively.

How has consumer financial pessimism changed in TransUnion's latest survey?

Pessimism increased to 27% in Q2 2025, up 6 percentage points from Q4 2024 (21%) and 4 percentage points from Q2 2024 (23%), reaching the highest level since tracking began in Q1 2021.

What factors are affecting consumer financial sentiment according to TransUnion?

Ongoing tariff discussions since April have increased uncertainty about future costs, while strong employment conditions and sustained wage gains help maintain consumer confidence.

How do different generations compare in financial optimism according to the TRU study?

Younger generations show highest optimism, with Gen Z at 67% and Millennials at 64% being most optimistic about their future finances.

What is the methodology of TransUnion's Q2 2025 Consumer Pulse study?

The study findings are based on a survey of 2,998 American adults conducted between May 1-12, 2025.