Consumer sentiment is in the dumps, according to a new report from Roanoke College.
"People are feeling about as bad as they have since we started collecting this data," says Alice Louise Kassens, senior analyst at the Institute for Policy and Opinion Research. She says most people in Virginia believe prices are going to go up.
"One year ago, August 2024, 46% of Virginians said that they believed that they were going to rise. Now, one year later, 65% say they believe they are going to rise," Kassens notes. "So almost two-thirds of Virginians believe prices, in the next year, are going to go up."
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The growing uncertainty is caused by the threat of tariffs, which are creating a chilling effect on the economy. That flagging consumer sentiment could manifest itself in reduced spending and ultimately lead to a shrinking economy.
"Consumer spending, you and I, what we buy, makes up 70% of total spending for the economy. So if we cut back spending, the economy contracts," Kassens says.
Stay tuned, she says, because the next two quarterly reports from the institute will tell the tale of whether those fears were justified, and if the persistent erosion in sentiment will lead to reduced household consumption.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
