Americans Just Spent $13.1 Billion on Halloween Despite 93% Recession Warning - Here's What It Means

In a striking display of economic contradiction, Americans spent a record-breaking $13.1 billion on Halloween in 2025—even as major investment bank UBS warned of a 93% probability of recession hitting the United States this year.

This unprecedented spending on costumes, candy, decorations, and parties occurred against a backdrop of economic anxiety, with inflation still stuck at 3%, the Federal Reserve cutting interest rates for the second consecutive month, and consumer confidence hitting five-month lows.

So why are Americans spending like there's no tomorrow while economists warn that tomorrow might bring financial hardship? The answer reveals something profound about consumer psychology, economic resilience, and what these spending patterns mean for your own financial future.

The Halloween Spending Boom: Breaking Down the Numbers

According to the National Retail Federation (NRF), total Halloween spending in 2025 reached $13.1 billion, surpassing the previous record of $12.2 billion set in 2023. This represents a significant jump from 2024's $11.6 billion.

Per-person spending hit an all-time high of $114.45—nearly $11 more than last year, representing approximately a 10% increase. This means the average American household celebrating Halloween spent more than ever before on what many would consider a "non-essential" holiday.

The $13.1 billion was allocated across four main categories:

• Costumes: $4.3 billion - Americans spent more on looking like zombies, superheroes, and politicians than ever before
• Decorations: $4.2 billion - From inflatable monsters to elaborate yard displays, decoration spending nearly matched costumes
• Candy: $3.9 billion - Despite health concerns and inflation, sweet treats remained a priority
• Greeting cards and other: $0.8 billion - Even the smaller categories saw robust spending

Nearly three-quarters of consumers (73%) participated in Halloween celebrations, essentially matching last year's 72%. The consistency of participation despite economic headwinds demonstrates the holiday's cultural staying power.

The 93% Recession Warning: What UBS is Saying

While Americans were stocking up on candy corn and fake cobwebs, UBS—one of the world's largest investment banks—issued a stark warning that sent shockwaves through financial markets.

After analyzing "hard data" from May through July 2025, UBS announced a 93% probability of the United States entering a recession this year. This extraordinarily high probability represents one of the most dire economic forecasts from a major financial institution in recent memory.

The warning is based on several concerning economic indicators:

• Labor market deterioration: Private payrolls fell by 32,000 in September—the largest drop since 2023
• Consumer confidence decline: Hit a five-month low despite Federal Reserve rate cuts
• Persistent inflation: Stuck at 3.1%, well above the Fed's 2% target
• Tariff impacts: Trade policies creating stagflationary pressures
• Government dysfunction: A four-week government shutdown delaying critical economic data releases

Other major institutions have also raised recession probabilities. J.P. Morgan increased its forecast to 40% (up from 25%), while the International Monetary Fund warned that U.S. tariff policies are pushing the global economy toward significant slowdown.

The Contradiction: Why Spend During Economic Fear?

This creates a fascinating paradox: If Americans are so worried about recession, why did they just set a spending record on a discretionary holiday?

The answer lies in several psychological and economic factors that reveal the complexity of consumer behavior during uncertain times.

1. "Investing in Joy" Psychology

Dr. Sarah Martinez, consumer behavior economist at Northwestern University, explains: "Consumers aren't carelessly spending money. They're carefully investing in joy. When the future feels uncertain, people place higher value on present experiences and memories."

Halloween represents one of the few holidays where families can create positive experiences relatively affordably. A $114 spend on costumes, decorations, and candy creates memories and social connections that feel valuable when other aspects of life feel unstable.

2. The Inequality Factor

KPMG's chief economist Diane Swonk recently noted: "The only groups that feel good about the economy now are making over $200,000 in the surveys and have large stock portfolios."

The Halloween spending boom is driven disproportionately by these higher-income Americans. Millennials—many of whom have achieved higher earnings in their 30s and 40s—are spending an average of $447 on Halloween, while Gen Z spends $328. Both groups are twice as likely as baby boomers to increase spending year-over-year.

This suggests the spending boom isn't universal—it reflects the widening economic divide where affluent Americans continue spending while middle- and lower-income households struggle.

3. Early Shopping and Discount Hunting

Nearly half of consumers (49%) began Halloween shopping in September or earlier, up from 47% the previous year. This early shopping allowed bargain hunters to spread costs over time and capture early-season discounts.

Discount stores saw a five-percentage point increase in shoppers this year (up to 37% from 32% in 2024). Additionally, 22% of consumers reused or recycled costumes from previous years, 20% DIY'd their own costumes, and 22% shopped at thrift stores.

This "value-conscious splurging" represents Americans finding ways to participate in cultural moments without breaking their budgets—spending strategically rather than recklessly.

4. The "Last Hurrah" Mentality

Some economists suggest the spending surge reflects a "last hurrah" mentality—consumers splurging before tightening belts in anticipation of harder times ahead.

"We often see spending spikes before recessions as consumers make major purchases they've been delaying, fearing they won't be able to afford them later," notes Michael Chen, retail economist at Goldman Sachs.

What This Means for Your Money

The Halloween spending paradox offers several important lessons for managing your personal finances during economic uncertainty.

Lesson 1: Consumer Confidence is Not Universal

Don't let aggregate spending data fool you into thinking "everyone else is doing fine." The $13.1 billion Halloween spend is driven heavily by high earners. If you're in the $40,000-$80,000 income range (the average American household), you're likely feeling very different economic pressures than the millionaires driving luxury spending.

Action step: Compare your spending to your own historical patterns, not to national averages that may be skewed by high earners.

Lesson 2: Strategic Splurging vs. Reckless Spending

The Halloween data shows Americans are spending strategically—shopping early, hunting discounts, reusing items, and focusing on experiences over stuff. This is different from the pre-2008 debt-fueled consumption that contributed to the financial crisis.

Action step: If you do spend on discretionary items, apply the "strategic splurge" principles: shop early, compare prices, reuse what you can, and focus on purchases that create lasting value or memories.

Lesson 3: Prepare for Recession Even if It Doesn't Come

While UBS warns of 93% recession probability, forecasts are not certainties. However, the smart money prepares for recessions regardless of probability.

Action steps for recession preparation:

• Build emergency fund: Aim for 3-6 months of essential expenses in a high-yield savings account
• Reduce high-interest debt: Pay down credit cards charging 20%+ interest before recession hits
• Diversify income: Develop side income streams or marketable skills
• Review insurance coverage: Ensure health, disability, and life insurance are adequate
• Audit subscriptions: Cancel unused services (average American has $623 in forgotten subscriptions)

Lesson 4: The Federal Reserve is Cutting Rates

The Fed cut rates by 0.25% on October 29—the second consecutive cut. This creates opportunities and risks:

Opportunities:

• Refinancing: Mortgage rates dipping below 6% for first time since 2023
• Lower borrowing costs: Car loans, home equity lines of credit getting cheaper
• Debt consolidation: Better rates for combining high-interest debts

Risks:

• Savings rates declining: High-yield accounts dropping from 5%+ to 4%+
• Rate cuts signal economic weakness: Fed wouldn't cut if economy was strong
• Potential for deeper recession: Rate cuts may be too little, too late

The Bigger Economic Picture

The Halloween spending boom exists within a larger, contradictory economic landscape:

Inflation Remains Sticky

Despite Fed rate cuts, inflation continues hovering around 3.1%—well above the 2% target. Tariff policies threaten to push consumer prices even higher, with some forecasts predicting 3% inflation persisting through 2026.

This means your dollar continues losing purchasing power even as the Fed tries to stimulate growth. The $114.45 spent on Halloween 2025 would have purchased significantly more in 2020.

Labor Market Softening

September's 32,000 private payroll decline signals labor market weakness. While unemployment remains relatively low, job growth is slowing and layoff announcements are increasing in sectors from technology to finance.

For workers, this means reduced bargaining power for raises and fewer opportunities to switch jobs for higher pay—strategies that helped many combat inflation in 2022-2023.

Stock Market Volatility

While stock portfolios of high earners remain strong (contributing to their confidence and spending), market volatility is increasing. Recession fears, geopolitical tensions, and uncertainty about Fed policy are creating unpredictable swings.

International Perspective: What Other Countries Are Doing

The U.S. isn't alone in economic uncertainty. The International Monetary Fund's October 2025 outlook describes the global economy as "in flux" with "dim prospects."

European economies are grappling with similar inflation challenges, while emerging markets face currency pressures from dollar strength and capital outflows. China's economic slowdown continues affecting global trade.

For Americans, this global context matters because:

• Import costs may rise (affecting everything from electronics to clothing)
• Export opportunities may decline (hurting U.S. manufacturers and farmers)
• Safe-haven flows into dollar and gold may accelerate (creating investment opportunities)
• Travel costs to foreign destinations may shift based on currency movements

Expert Predictions: What Happens Next?

Financial experts are divided on whether the Halloween spending boom indicates economic resilience or represents a last gasp before contraction.

Optimistic View

"American consumers have proven remarkably resilient," says Lisa Thompson, chief economist at Bank of America. "Strong household balance sheets, low unemployment, and wage growth above inflation for high earners suggest spending can continue even if we hit a mild recession."

Pessimistic View

"This is classic pre-recession behavior," warns David Rodriguez, senior strategist at UBS. "Consumers are splurging on experiences and discretionary items before tightening belts. The 93% recession probability reflects hard economic data, not just sentiment."

Middle Ground

"We're likely heading for a 'rolling recession' where different sectors and income groups experience downturns at different times," suggests Rachel Kim, economist at J.P. Morgan. "High earners keep spending while middle and lower incomes already feel recessionary pressures."

What You Should Do Right Now

Whether recession arrives with 93% probability or gets delayed, certain financial moves make sense regardless:

Immediate Actions (This Week)

1. Check your emergency fund: Calculate if you have 3-6 months expenses saved
2. Review monthly subscriptions: Cancel unused services (use AI tools to find hidden subscriptions)
3. Update your resume: Even if employed, keep it current in case of layoffs
4. Compare savings rates: Ensure you're getting at least 4% on emergency funds

This Month

1. Create a recession budget: Plan what spending you'd cut if income dropped 20%
2. Refinance consideration: Check if lower rates make refinancing worthwhile
3. Skill development: Invest in learning marketable skills for career security
4. Insurance audit: Verify coverage is adequate for recession scenario

Next 3 Months

1. Boost emergency fund: Increase from 3 months to 6 months if possible
2. Debt reduction: Pay off highest-interest debt aggressively
3. Diversification: Review if investment portfolio is too concentrated in stocks
4. Side income: Start building secondary income stream

The Bottom Line

The $13.1 billion Halloween spending boom amid 93% recession warnings reveals an America of economic contradictions: affluent consumers confidently splurging, middle-class families strategically participating, and lower-income households already experiencing recessionary pressures.

This isn't your grandfather's recession warning—it's more nuanced, more divided by class, and more dependent on your specific economic situation than simple nationwide statistics suggest.

The smart response isn't panic or denial—it's preparation. Build your safety net, reduce debt, increase skills, and position yourself to weather whatever economic storm may or may not arrive.

Because whether UBS's 93% forecast proves accurate or not, the families who prepared for tough times won't regret being ready. And if the recession never materializes, you'll simply have a stronger financial foundation for whatever comes next.

The Halloween spending boom shows that Americans value joy and experiences even in uncertain times. The question is: can you afford that $114.45 worth of Halloween spirit when recession odds are nearly certain? Only you can answer that based on your specific financial reality—not national averages driven by millionaires in very different circumstances than your own.