CHICAGO—As headlines warn of rising tariffs and costlier goods, more than one in four U.S. consumers—27%—now say they’re pessimistic about their household finances in the year ahead, according to new data from TransUnion.
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, the company said, citing its Q2 2025 Consumer Pulse study.
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, TransUnion said.
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,” continued Wise. “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
Recession Fears Return
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%, TransUnion noted.
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.
Charlie Wise
“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,” TransUnion said.
“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.