The Impact of Tariffs, Federal Workforce Cuts, Declining Consumer Sentiment Will Weigh Heavily in The Dragas Center’s Annual Mid-Year Economic Forecast

By Joy Vann

Since the United 91����Ƶs imposed tariffs globally in early April, followed by a 90-day pause and much speculation about deal making, policy makers, academics and average consumers standby as the word of the day remains “uncertainty.”

Tariffs, cuts to the federal workforce and the latest news impacting local, state and  national economies will be discussed by economists from the  at Old Dominion 91����Ƶ during the 2025 Economic Forecast Mid-Year Breakfast, held in partnership with ODU’s Strome College of Business.

The Dragas Center’s Director, Bob McNab, and Deputy Director, Vinod Agarwal, will share their views at an annual breakfast hosted by the Virginia Peninsula Chamber at 7:30 a.m. on June 6, at the Holiday Inn, 980 Omni Boulevard in Newport News.

Agarwal, Economic Forecasting Project Director, will deliver the updated Hampton Roads economic forecast and discuss the possible impacts of the federal job terminations which have yet to manifest.

“Cuts to the federal civilian workforce will affect Virginia and Hampton Roads significantly, depending on where the cuts are and who is being cut. We still do not have the exact data,” he said. “We know overall how many workers have been laid off, but we do not know how many in Virginia have been taken off the books.”

The result of the terminations for the local and regional economies remains to be seen.

“There are a lot of uncertainties going on in the marketplace,” he said. “These numbers will start to show up in the coming months.”

A much-anticipated topic of the event will be the possible impact of tariffs.

“When we impose a tariff on foreign products, we end up paying for most of this tariff in the form of higher prices,” Agarwal said. “Some of the tariff may be absorbed by the exporter. Some of the tariff may be absorbed by the importer, and some obviously, will be paid for by the consumer.”

Noting that most of the tariffs took effect in early April, he said the numbers and statistics have not yet presented. As deals between the United 91����Ƶs and other countries continue to develop, Agarwal that the American public remains confused.

“They're not sure what is going on,” he said. “Consumer sentiment is getting worse. The several measures of consumer sentiment all show that it’s going in the wrong direction.”

The housing market, another topic that will be covered, presents an interesting story, Agarwal said. While sales have yet to pick up, prices continue to increase.

Noting that the Federal Reserve did not recently change interest rates on, taking a “wait and see” approach, he said consumers are “feeling the uncertainty.”

“I think American consumer households are getting used to the higher interest rates, not that they like it, but typically home buyers, when they are trying to buy home, try and figure out what to do,” he said. “Even if the prices are increasing, they're not increasing at the same pace as they did in 2023 or 2024. But I do expect interest rates to stay high, again due to uncertainty caused by the current administration’s policies.”

Tickets to the event are $45. and table sponsorships are available. Contact Allie Carson at the Virginia Peninsula Chamber (allie@vpcc.org) for more information.