RICHMOND — Virginia consumers don’t know whether to buy now or hold off purchases because of shifting tariff policies and President Donald Trump’s threats, according to a new survey by Roanoke College.
Consumer sentiment continued to fall in Virginia, though not as steeply as nationally, according to the latest quarterly survey that the Institute for Policy and Opinion Research released on Wednesday.
The survey shows another one-point decline in consumer sentiment index, on top of the 13-point drop the survey reported in February, as Virginia consumers react to the deepening uncertainty over Trump’s ever-shifting trade and tariff policies.
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“They’re certainly not happy about tariffs,” Alice Louise Kassens, a Roanoke College economics professor and senior analyst at the institute, said in an interview on Wednesday.
But the threat of higher prices because of tariffs on goods imported to the U.S. has affected consumer behavior in different ways, the survey found. Some responded that now is a good time to buy larger, durable goods before tariffs drive up prices, while others said they’re holding back because tariffs already have raised the cost of their purchases. Overall, 37% of the 716 Virginians surveyed this month said now is a good time to make those kinds of large purchases.
Consumers remain unsure where tariffs on various trading partners will end up and how long they will last. This week, Trump announced tariffs on goods from the European Union and then paused them a day later. Similarly, the president slapped tariffs up to 145% on goods from China, only to reduce them to 30% under a temporary agreement that also reduced Chinese retaliatory tariffs on U.S. exports.
“It has kind of a numbing effect,” Kassens said.
Second-lowest level
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Overall, however, the direction of consumer sentiment remains down. The survey showed declines in its indices for consumer sentiment, expectations and current economic conditions, which already had reached the second-lowest level in its 14-year history.
“Consumer sentiment in Virginia continues to erode, reaching the second-lowest level on record,” Kassens said in a statement announcing the results. "While the labor market remains strong and wage growth is outpacing inflation, uncertainty is weighing heavily on consumers, particularly around tariffs.
“This uncertainty is reflected in both short- and long-term inflation expectations, which remain elevated despite recent easing in actual inflation rates,” she said.
Consumer pessimism is even stronger nationally, according to the latest survey by the University of Michigan, which also showed declines in consumer sentiment, expectations and assessment of current economic conditions after four consecutive months of steep declines.
The danger remains that souring consumer sentiment will start to affect their behavior and spending, which accounts for about 70% of economic output. So far, Kassens said that consumer spending “has remained robust, albeit tempered.”
“However, if sentiment continues to decline, we may see a pullback in spending that could slow economic growth or even trigger a recession,” she said. “The divergence between Virginian and national sentiment, where Virginia remains more optimistic, suggests regional resilience, but that could be tested if inflationary and uncertainty pressures persist.”
In the interview, Kassens said that threat would intensify “if some of these big tariffs go into effect and appear to be there for a long time.”
“Then you may have a problem,” she said.