The first wave of the Gen Z Economic Tracker captures a group of young Americans trying to manage a difficult financial moment in real time.
More than half of Gen Z respondents, 56%, believe the economy will be in, or moving toward, a recession within the next year. Two-thirds, 67%, say they are more stressed about their finances than they were a year ago. And just 21% say they were able to cover their bills and still have money left firom their last paycheck.
Three things are happening at once
Gen Z expects the economy to get worse, many are already stretched thin, and they are still spending in places that appear to feel worth it.
What we’re seeing is a complicated pattern that seems a bit unclear on first blush. Gen Z are cutting what feels easier to reduce, while continuing to spend in some categories tied to daily life, social connection, appearance, and experiences.
So what’s the pattern? Where does Gen Z feel squeezed? Where are they adjusting? And what do those choices reveal about how young adults are trying to stay afloat without opting out entirely?
Recession concerns are shaping Gen Z’s financial mindset
One of the clearest findings is that economic uncertainty is shaping how Gen Z thinks about the year ahead.
More than half, 56%, of Gen Z respondents believe the economy will be in, or moving toward, a recession within the next year. That is not just a forecast. It is part of the financial backdrop many young adults are living with.
The broader picture is not much more comfortable.
Taken together, these findings suggest that many young Americans are not only worried about the economy. They are also questioning whether the usual path toward financial stability is becoming harder to follow.
The pressure is visible in more immediate terms as well. Just 21% of Gen Z respondents say they were able to pay all of their bills and still have money left over after their most recent paycheck.
Financial pressure is forcing short-term trade-offs
What’s happening with the money they earn on the paycheck tells a broader story than general pessimism.
Expecting a recession is one thing. Finishing a pay period with little or no money left after covering bills is another. For the 79% of Gen Z respondents who did not say they had money left over after their most recent paycheck, there is not much evidence of financial slack.
That does not mean every young adult is in financial trouble. The data does not support that. But it does suggest that many are operating with limited room to absorb higher costs, unexpected expenses, or extra spending.
In that context, spending decisions become sharper. The question is not simply whether Gen Z is spending less. It is what they are willing to reduce, what they are trying to protect, and where they still see enough value to keep spending.
Gen Z is cutting back, but not everywhere
One of the more useful findings from the study is that Gen Z’s response to financial pressure is not evenly distributed.
Some categories are clearly being trimmed. Among Gen Z respondents:
At the same time, Gen Z respondents are more likely than older generations to report increased spending across several lifestyle-focused categories, including:
- Takeout and food delivery
- Travel
- Events and entertainment
- Clothing
- Personal care
On the surface, that can look inconsistent. Why cut back on streaming while spending more on takeout, travel, events, clothing, or personal care?
The better read is that different kinds of spending are being treated differently.
A streaming subscription may be easier to cancel, rotate, downgrade, or replace. Other purchases may play a different role in daily life, social plans, appearance, or personal routines. The data does not prove the motivation. It does show the pattern.
Some expenses are easier to cut. Others appear more resilient.
What the findings suggest
Gen Z is worried about the economy. A majority expect recessionary conditions over the next year. Many feel financially behind, or believe their generation has it harder than previous generations. Most say their financial stress has increased over the past year. And only a small share say they had money left over after covering all their bills from their most recent paycheck.
But the spending data complicates the picture. Gen Z is cutting back entirely. They are choosing where to cut.
Streaming services and clothing brands are areas where some respondents report looking for savings. At the same time, Gen Z is more likely than older generations to report spending more on takeout and delivery, travel, events and entertainment, clothing, and personal care.
The mistake is assuming financial stress makes all spending disappear. The evidence points to something more specific: Gen Z is cutting what feels more replaceable and continuing to spend where they still see value.
Methodology
Findings are based on Wave 1 of the Gen Z Economic Tracker, a quantitative survey of 1,390 U.S. respondents (age 18+).
Significance testing was conducted using independent t-tests for means and independent z-tests for percentages. Uppercase letters indicate statistically significant differences at the 95% confidence level.
Field Window: May 7 – June 4, 2026
Generational definitions used in the study:
- Gen Z: 18-28
- Millennials: 29-44
- Gen X: 45-64
- Baby Boomers: 65+
