Trump's plan to impose 25% tariffs on EU goods could spark retaliation from the bloc's 27 nations and drive up prices for US consumers. Announcing the tariffs during a cabinet meeting, Trump claimed the EU was created to "screw" the US, accusing it of blocking American cars and farm products...
Virginians share the same rising fears about inflation and tariffs as the rest of the country, according to a new survey by Roanoke College that shows consumer sentiment plunging in January to its lowest level since the inflation rate peaked almost three years ago after the COVID-19 pandemic subsided.
The college's Institute for Policy and Opinion Research reported on Thursday that its consumer sentiment index dropped by 13 points since the last quarterly survey published in November. Consumer expectations dropped even more, by almost 16 points, while their assessment of current economic conditions also declined by 8.5 points.
"Consumer sentiment crashed to kick off 2025, dropping to the second-lowest level in series history and the lowest since May 2022, which was during the peak of the post-pandemic inflation," said Alice Louise Kassens, economics professor at Roanoke College and senior analyst at the research institute.
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Kassens said consumers continue to spend, with wages increasing faster than prices, but she warned, "If consumers cut back because of actual or expected inflationary pressures, the economy will contract and potentially move into a recession."
The next day, the economic news was mixed, as one national index for consumer prices on Friday showed inflation rising by 0.3% last month, or 2.5% higher than a year ago, a slight decline from the previous month. But it also showed a drop in consumer spending of 0.2%, which was the opposite of expectations, in part because of severe winter weather in January.
The new Personal Consumer Expenditures report is important to the Federal Reserve Board, which prefers it to the Consumer Price Index as a measure of inflation as it tries to bring down the increase in prices to 2% year-to-year. The CPI reported earlier this month that inflation increased last month by 3% over the same month a year earlier.
Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said Friday that the latest economic report "makes one thing clear: inflation is still not under control."
The committee also faulted the budget resolution Republicans in the House of Representatives adopted this week, as well as Senate plans for a pair of funding bills that would cut discretionary spending but increase the deficit by approving a package of new tax cuts and spending on national security.
Richmond Fed president says economy may face 'inflationary headwinds'
"Higher deficits from tax cuts and spending increases will only feed the flames of inflation," MacGuineas said. "And they will further boost interest rates as well."
The Federal Open Market Committee lowered the overnight lending rate by 1 percentage point last year after raising the rate aggressively to curb the increase in inflation. Emergency federal spending, snarled global supply lines and pent-up consumer demand after the COVID-19 pandemic sparked the increase.
But the Fed has declined to lower the rate further this year in the face of what Tom Barkin, president and CEO of the Federal Reserve Bank of Richmond, called the uncertainty over tariffs that Trump is imposing on China and trade partners, such as Canada and Mexico. Barkin, in speeches this week in Richmond and Northern Virginia, also cited concerns about weakening of the labor force, federal deficits and increased defense spending in response to geopolitical threats.
"All these trends suggest we could see our tailwinds replaced by inflationary headwinds," he said.
Those trends already are causing anxiety among consumers, according to a recent national survey by the University of Michigan. It shows consumer sentiment falling by almost 10 percent in January from the previous month and almost 16% from the same month a year earlier.
Anxiety over cuts in jobs, by the Trump administration and large private employers, also is affecting consumers, said Kent Engelke, chief economic strategist and managing director at Capitol Securities Management in Richmond. "This is all affecting sentiment," he said.
Kassens, at Roanoke College, said consumers are expecting higher prices for the near and long term, primarily because of tariffs and "their resulting inflationary effects."
"As goes the consumer, so goes the economy," she said. "If lagging consumer sentiment persists and manifests in reductions in consumer spending, we could be facing a challenging 2025."
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01-03-1965 (cutline): Newsprint is hoisted from ship at Richmond's Deepwater Terminal. More sailings of ocean-going ships from here are predicted in 1965.
Crawford
05-7-1958 (cutline): Tanker unload asphalt for American Bitumuls at Jame River Docks.
Staff photo
04-03-1964 (cutline): This sea-going houseboat ends an 847-mile railroad trip here yesterday as it is swung off a railroad car at Deepwater Terminal, ready for launching into the James River. The 38-foot, steel-hulled boat was built by the River Queen Boat Works at Gary, Ind., and transported here for Ward Marine, Inc., by the Chesapeake & Ohio Railway. The boat is powered by two 160-horse-power engines.
Times-Dispatch
09-08-1954 (cutline): Canadian-built Notting Hill tied up at Richmond's Deep Water Terminal
Staff photo
09-21-1965 (cutline): The El Rancho, an Italian Cattle Ship, loads hay for Transatlantic Trip. Herd of Virginia Dairy cattle will go aborad today for milestone voyage.
Staff photo
05-23-1947: Richmond Deep Water Terminal, paper shipment arrives.
Times-Dispatch From the Archives: Deep Water Terminal
In December 1964, rolls of newsprint were hoisted from a ship at Richmond's Deepwater Terminal in preparation for delivery. The Virginia State Ports Authority was hoping to substantially increase trade activity; it had recently opened an office in Tokyo, adding to international locations in London and Brussels.
The port was built in 1940 as a general marine cargo terminal facility. For many years sugar and tobacco were the main products passing through the port. Newsprint also became a major cargo when local newspapers began to use domestic paper. In the late 1970s, the first containerized ocean shipping was introduced at the port and the importing and exporting of products expanded immensely.
Today, the port continues to bring in and take out cargo. Products passing through include machinery, aluminum, consumer goods, textiles chemicals, frozen seafood and more.
Did you know that the history of the port dates back to colonial times?
In 1619, Falling Creek Ironworks was built in the Virginia Colony which eventually became the site of the town of Warwick. Three years later, the facilities were utterly destroyed and the majority of the colonists killed in the Indian Massacre of 1622.
The unincorporated town and port of Warwick was located in a geographically strategic area where the James River was navigable for about 5 miles south of downtown Richmond -- east of the fall line. Warwick was thus as far up river as most historic ships could securely navigate.
Because of its location, the town of Warwick was also targeted during the Revolutionary War. In the spring of 1781, British troops destroyed the town, burning warehouses, ships and store houses to the ground.
While the "Lost town of Warwick" no longer exists, the port's facility located at Deepwater Terminal encompasses part of the famous old site.
01-03-1965 (cutline): Newsprint is hoisted from ship at Richmond's Deepwater Terminal. More sailings of ocean-going ships from here are predicted in 1965.
Crawford
05-7-1958 (cutline): Tanker unload asphalt for American Bitumuls at Jame River Docks.
Staff photo
04-03-1964 (cutline): This sea-going houseboat ends an 847-mile railroad trip here yesterday as it is swung off a railroad car at Deepwater Terminal, ready for launching into the James River. The 38-foot, steel-hulled boat was built by the River Queen Boat Works at Gary, Ind., and transported here for Ward Marine, Inc., by the Chesapeake & Ohio Railway. The boat is powered by two 160-horse-power engines.
Times-Dispatch
09-08-1954 (cutline): Canadian-built Notting Hill tied up at Richmond's Deep Water Terminal
Staff photo
09-21-1965 (cutline): The El Rancho, an Italian Cattle Ship, loads hay for Transatlantic Trip. Herd of Virginia Dairy cattle will go aborad today for milestone voyage.
Staff photo
05-23-1947: Richmond Deep Water Terminal, paper shipment arrives.
Times-Dispatch
Michael Martz (804) 649-6964
mmartz@timesdispatch.com
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State Politics Reporter
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