Alice Kassens Roanoke College photo
Mixed signals from the new Virginia Consumer Sentiment Report released by Roanoke College, showing that consumer sentiment fell sharply after modest gains were recorded in the first quarter survey. The new online poll taken with almost 600 respondents in early to mid-August reveals that Virginians feel worse than they did about their circumstances in February. Wage growth has not kept pace with the resurgence in inflation in the latest Roanoke College survey, nearly erasing the real-wage cushion that had supported household spending earlier in the year. Roanoke College economist Dr. Alice Kassens says stubborn inflation and higher gas prices related to the war with Iran are a major reason. But Virginia households keep spending and are more optimistic than the national average about the future. Kassens, Dean of the Roanoke College School’s of Business, Economic and Analytics says politicians running on both sides of the aisle can make hay with the survey results:
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(from Roanoke College report) Virginia consumer sentiment fell sharply in August 2026, erasing the modest gains recorded at the start of the year. The Virginia Index of Consumer Sentiment (ICS) fell to 59.6, down 7.8 points since February and 4.9 points below where it stood a year ago. All three components (current conditions, expectations, and overall sentiment) now sit below their five-year average of 68.1.
The decline was led by how Virginians see their present circumstances. The Index of Current Conditions (ICC) fell 11.0 points to 53.7, its lowest level since the 2022 inflation spike. The Index of Consumer Expectations (ICE) fell a smaller 5.8 points to 63.5, essentially matching its lowest level in the 15-year history of this survey, last seen in May 2022. Virginians, in other words, feel considerably worse about their present circumstances than they did in February, but have held onto more of their optimism about the future. Compared with a year ago, that split is even clearer: Current conditions are down 12.0 points, while expectations are essentially unchanged.
“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.”
“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. That resilience suggests households see the current price pressures as tied to a specific, and potentially temporary, geopolitical shock rather than a fundamental shift in the economy’s trajectory. Whether that optimism holds will depend heavily on how inflation and the labor market evolve over the next two quarters.”
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