Consumer expectations are going up in Virginia as gas prices have been coming down, according to a new quarterly poll about the economy.
The Virginia Consumer Sentiment Report, done by Roanoke College, shows the largest jump in consumer expectations in more than four years.
The increase in sentiment is only the third upward tick since the start of the pandemic, and the largest gain since February 2018. Since the beginning of the pandemic in March 2020, the index lost 30 points.
The main reason for the improved sentiment is the recent drop of gasoline prices from a record high in June, according to study author Alice Louise Kassens, a professor of economics and senior analyst at the Roanoke College Institute for Policy and Opinion Research.
“As gas prices fall, not only will this make filling your tank cheaper, but the indirect effect of higher fuel prices on food and other shipped items will also lessen, allowing each hard-earned dollar to go farther and lessen the financial pinch we are all feeling.”
Kassens said the snapshot of consumer confidence is important, because it can influence the future. “If people are worried about the economy’s future, it can become a self-fulfilling prophecy, and we can push ourselves into a recession.”
She said the labor market remains strong.
“The pullback in quarantine recommendations for school-age children will give parents more freedom to pursue job openings, further strengthening the labor market and bolstering our economy.”
The tick up comes at a time when Virginians have been pessimistic about their economic well-being.
Only a quarter of respondents report their finances being better today than a year ago, despite the increase in home values. Virginians see their wages buying considerably less today than a year ago, prompting their dour report of the current conditions. Less than a third of respondents believe that now is a good time to buy large durable goods like refrigerators. However, they are slightly more optimistic than the nation as a whole.
The poll of 664 people came from random telephone calls to 429 Virginians and 235 responses were drawn from an online panel of Virginians. The poll was conducted between Aug. 7 and Aug. 16, and has a sampling error of plus or minus 4%.