US consumer confidence takes sharp turn heading into holiday season

Retailers look forward to the holiday season, as U.S. consumers tend to spend generously on gifts in the weeks between Thanksgiving and Christmas.

And after a slow start to the year,  U.S. GDP has recovered, posting two consecutive quarters of nearly 4% growth after contracting by 0.5% in the first quarter.

A surge of imports ahead of the implementation of U.S. tariffs caused the contraction earlier in the year, but those imports fell in the second quarter, making growth appear stronger, according to The Economist.

However, while consumption has risen, the job market in America has slowly weakened.

“Over the last decade, companies have shied away from announcing layoffs in the fourth quarter, so it’s surprising to see so many in October. With the onset of social media and the ability for workers to share their negative experiences with their employers, the trend of announcing layoffs before the holidays fell away, a practice that seemed particularly cruel,” Andy Challenger, chief revenue officer of Challenger, Gray, & Christmas, recently said.

U.S. employers issued WARN notices for 39,006 Americans in October, according to research by the Federal Reserve Bank of Cleveland.

The Fed has tracked WARN notices since 2008, and the number has only ever been higher in 2008, 2009, 2020, and May 2025.

Consumer confidence drops to its lowest level since April

In April, President Doland Trump unveiled his plan to raise tariffs on imports from China, Canada, Mexico, and all other countries.

That action resulted in a significant decline in consumer confidence. Over the past few months, that anxiety has slowly abated, but the latest data from The Conference Board suggests it is creeping back as we head into the holiday season.

Related: Government layoff news is worse than expected

Consumer confidence in November fell to its lowest level since April as "consumers were less sanguine about current business and labor market conditions," said Dana M. Peterson, chief economist for The Conference Board.

Just 20.1% of consumers said business conditions were "good," down from 20.7% in October, while 16.9% said conditions were "bad," up from 14.5% the previous month.

And it's not just consumers. Job seekers are also getting gloomy.

"The labor market differential —the share of consumers who say jobs are 'plentiful' minus the share saying 'hard to get'—dipped again in November after a brief respite in October from its year-to-date decline," Peterson said.

Just 14.6% of consumers expect jobs to be more plentiful in the future, down from 15.8% in October, while 27.5% expect fewer jobs, also down from 28.8% in October.

Only 15.3% of consumers expect their incomes to rise, a sharp decline from 18.2% in October. Meanwhile, 13.8% expect their incomes to decrease, up from 11.8%.

Major employers have been announcing massive layoffs

Amazon, UPS, and Target, three of the largest employers in the country, have already announced plans to lay off tens of thousands of workers in the coming weeks.

Major layoffs in the past month

• Target revealed plans in late October to eliminate 1,800 corporate jobs, marking its second-largest corporate downsizing ever.
• Amazonannounced another round of layoffs just before the holidays. The cuts affected 14,000 corporate employees across multiple departments, aiming to reduce bureaucracy by “removing layers and shifting resources” to better serve its investments and customers. 
• UPS has cut about 48,000 jobs so far this year, including 34,000 positions through its Network Reconfiguration and Efficiency Reimagined program.

Although numerous other layoffs, especially in the tech industry, have been confirmed, it sometimes takes weeks or even months for them to actually take effect.

Companies such as Amazon, Target, Salesforce, and Oracle aren’t alone when it comes to reducing headcount ahead of the holidays.

General Motors is cutting hundreds of jobs at its Georgia IT center. And Molson Coors eliminated 400 salaried jobs across its Americas business, representing about 9% of its white-collar workforce.

According to tech market intelligence firm UnearthInsight, as many as 500,000 white-collar software workers could be laid off over the next two to three years, with approximately 70% of those layoffs affecting workers with four to 12 years of experience.

Related: US job market hits a new low in October