Consumer sentiment tumbles as Virginians feel pressure from inflation, new poll finds

Virginia consumer sentiment fell sharply in August, wiping out modest gains from earlier in the year as renewed inflation and a lackluster labor market weighed on household finances, according to a new Roanoke College poll released Thursday.

The Virginia Index of Consumer Sentiment fell to 59.6, down 7.8 points from February and 4.9 points from a year ago. The overall index and its two components — current conditions and consumer expectations — are now below their five-year average of 68.1.

“Virginia households are feeling the economy’s ups and downs much more in their day-to-day finances than in their outlook for the future,” said Alice Kassens, professor of economics and dean of Roanoke College’s School of Business, Economics, and Analytics. 

“The drop in how households view current conditions reflects the toll that renewed inflation and a cooling labor market has taken on household budgets. Wage growth, which had been outpacing inflation for much of the past year, is nearly even, leaving consumers with little real income cushion.”

Virginians were particularly downbeat about their current circumstances. The Index of Current Conditions dropped 11 points to 53.7, the lowest level since the inflation spike of 2022 and 12 points below where it stood a year ago. 

Expectations for the future held up somewhat better. The Index of Consumer Expectations fell 5.8 points to 63.5, essentially matching the lowest level in the survey’s 15-year history, last reached in March 2022. However, unlike the current conditions measure, the expectations index is largely unchanged from a year ago.

“Even so, Virginians’ expectations for the year ahead have held up comparatively well, and the commonwealth continues to outperform the nation on every measure of sentiment,” Kassens said. 

The data suggests Virginia households tie the price pressures to “a specific, and potentially temporary, geopolitical shock,” not a lasting economic paradigm shift, she said.   

“Whether that optimism holds will depend heavily on how inflation and the labor market evolve over the next two quarters.”

Despite the declines, Virginian’s sentiments exceeded national ones. The state’s current conditions index of 53.7 remained slightly above the national reading of 51.9. 

Forty-two percent of respondents said their financial situation was worse than it was a year ago, while 51% said it was a bad time to purchase large, durable goods. 

The gap was wider when Virginians were asked about the future. The state’s consumer expectations stood 12 points above the national reading of 51.5, the largest difference between Virginia and the rest of the country among the three sentiment measures. 

Thirty-four percent of Virginians said they believed their household finances would improve over the next year, while 9% expected strong economic growth over the next five years. Concerns about gas and grocery prices appeared to weigh more heavily on views of the current economy than on longer-term expectations. 

Those concerns come as the national economy continues to send mixed signals. Real gross domestic product rose at an estimated annualized rate of 1.5% during the second quarter of 2026, down from 2.1% in the first quarter. Consumer spending moved into the opposite direction, accelerating from an annualized rate of 0.5% to 3.4%.

Hiring also slowed over the summer. The national unemployment rate dipped to 4.1% in July, but the economy lost a net 23,000 jobs that month after adding just 20,000 in June. The ratio of job openings to unemployed workers increased modestly to 1.1 in July, suggesting labor demand had not collapsed even as hiring stalled.

At the same time, wage gains fell behind inflation. Average hourly wage growth slowed down from 3.7% in February to 3.2% in July, while inflation, as measured by the Consumer Price Index, rose from 2.4% to 3.3%. 

Much of the renewed inflation was attributed to higher gas and energy prices stemming from the conflict in the Middle East. 

Thursday’s survey, the only regular poll measuring consumer sentiment in Virginia, was conducted online from Aug. 4 through Aug. 7 using Qualtrics survey software. Participants were recruited through Prolific, an online research panel, and eligibility was limited to Virginia residents age 18 and over. 

Researchers collected a total of 574 responses. After incomplete responses were removed, the weighted sample included 547 respondents.