As tariffs loom over the economy, consumers are showing a divided response, with certain sectors seeing a rush in purchases while broader retail trends reveal hesitation and restraint. Car dealerships across the country are experiencing a surge in showroom traffic, with buyers eager to secure new vehicles before expected price hikes take effect. Some shoppers are even replacing high-end items like iPhones earlier than planned, driven by fears of tariffs pushing prices higher. However, outside of these big-ticket categories, retailers have not observed widespread stockpiling or a frenzy of early purchases. Instead, U.S. consumers seem more inclined to hold back, adopting a wait-and-see approach as economic uncertainty clouds their spending decisions.
According to consumer surveys and the latest Federal Reserve Beige Book report, consumer spending excluding autos has been weaker overall. The Beige Book, which compiles economic observations from around the country, revealed that five of the Fed’s districts reported slight growth, four districts experienced slight to modest declines, and three districts saw relatively unchanged trends since the previous report. While vehicle sales and some nondurable goods enjoyed moderate to robust performance, driven by fears of tariff-induced price increases, leisure and business travel softened, highlighting growing anxieties around international trade policy.
Early data suggests that tariffs have intensified the public’s cautious attitude. Companies across industries, from Chipotle to PepsiCo to American Airlines, have reported pockets of slower spending. Steve Zurek, vice president of thought leadership at NielsenIQ, described the shift as consumers embracing a “conservation mentality” for their cash, reacting to turbulent headlines, market volatility, and growing uncertainty over the direction of U.S. trade policy. “There’s so much uncertainty right now that shoppers just don’t know what to do,” Zurek noted. “There’s nowhere to hide here — all they can do is control the household economics they have.”
Consumer surveys back up this cautious stance. A NielsenIQ survey conducted in late March, just before President Trump announced steep tariffs on dozens of countries, found that about 35% of consumers planned to delay major purchases such as homes, cars, appliances, or furniture due to tariffs. In contrast, only 7% said they intended to accelerate their purchases to avoid higher prices. This reluctance to spend is reflected in other economic indicators as well. Home sales in March fell to their slowest pace since 2009, a trend attributed to both higher mortgage rates and consumer unease.
While consumers tread carefully, businesses are equally wary. Retailers, airlines, and manufacturers are closely monitoring consumer behavior, adjusting their inventories in anticipation of changes in demand. Some companies have fast-tracked orders of durable goods like equipment to beat expected price increases, but much of the economy remains in a holding pattern, awaiting clearer signals.
One clear exception to the cautious trend is the auto sector. Vehicle sales surged in March, outperforming the broader retail market. According to Commerce Department data, while overall retail sales excluding motor vehicles and parts grew by just 0.5%, auto sales spiked by 5.3%. Despite Trump’s decision to delay some additional tariffs, he maintained a 25% levy on all imported vehicles, sparking a rush among consumers. Cox Automotive estimates that the average cost of imported vehicles could jump by $6,000, and even U.S.-assembled vehicles might see an increase of $3,600 because of tariffs on automotive parts. These expected price hikes are in addition to earlier tariffs on steel and aluminum, which have already added between $300 and $500 to the cost of a new vehicle.
Automotive executives and dealers across the country reported a noticeable spike in traffic and sales as soon as the tariffs were confirmed. Charlie Chesbrough, senior economist at Cox Automotive, noted that “concerns about potential future vehicle prices due to tariffs led to a surge in March sales, and April began with similar robustness.” According to Cox, new vehicle sales were running 22% above last year’s seasonally adjusted pace and up more than 8% in volume through early April. Dealers described the atmosphere as a mini-buying frenzy, drawing comparisons to the panic buying seen during the early months of the Covid pandemic.
Craig DeSerf, executive manager of Gulf Coast Chevrolet Buick GMC in Texas, described the situation plainly: “It’s been busy. Everybody’s buying now because they’re afraid the prices are going up.” Michael Bettenhausen, a dealer in Illinois and chair of the Stellantis dealer council, echoed the sentiment, emphasizing that although tariffs have not yet affected current inventories, savvy buyers understand that waiting could soon cost them thousands more.
However, there is concern within the industry that this short-term boost could lead to a sharp drop-off in sales once tariff-free inventories are depleted. Chesbrough warned that vehicle prices are likely to climb as inventory shrinks, and with rising economic anxieties and declining consumer confidence, the auto sales outlook beyond April appears much less certain.
Beyond automobiles, early purchases spurred by tariff fears have been more muted. According to a GlobalData survey of nearly 5,800 U.S. adults conducted in late March and early April, nearly 12% of respondents said tariffs had accelerated their car purchase. About 10% reported buying furniture earlier than planned, and nearly 9% said they had expedited the purchase of large electronics. However, for everyday goods such as paper towels, clothing, and household items, no significant early buying trend has emerged.
Retail giants like Walmart have confirmed this pattern. Chief Financial Officer John David Rainey said earlier this month that while some stores saw stock-ups ahead of last fall’s port strikes, the company has not observed “pandemic-like buying” amid the current tariff fears. He noted, however, that Walmart’s sales patterns have become more volatile, with spending swinging unpredictably from week to week and even day to day. Factors such as weak consumer sentiment in February, poor March weather, and delayed tax refunds have all contributed to the instability.
Similarly, Sam’s Club CEO Chris Nicholas reported no major changes in customer behavior around appliance and electronics purchases. Retail foot traffic data from Placer.ai supports these observations, showing increased visits to superstores, grocers, and clothing retailers early in April but a decline in traffic to home improvement and furniture stores.
April spending was buoyed somewhat by the later timing of Easter compared to last year, which artificially inflated year-over-year sales comparisons. Spending rose 3.8% through mid-April compared with 2.7% in March, according to JPMorgan, but analysts warned that much of this lift was likely temporary and not indicative of a broader trend reversal.
Even in sectors unrelated to retail, the impact of tariffs and economic uncertainty is being felt. Procter & Gamble’s CFO Andre Schulten reported a “more nervous consumer,” citing a pullback in spending and decreased store traffic over the past two months. Airline executives have also flagged weakening demand, particularly in the economy leisure and corporate travel segments. Airfare prices dropped by 5.3% in March following a 4% decline in February, reflecting carriers’ efforts to stimulate demand through fare sales as booking volumes soften.
Delta Air Lines CEO Ed Bastian observed that the company’s robust start to 2025 was fading, with corporate travel growth — initially up 10% from 2024 levels — flattening by early April. Widespread economic concerns, trade tensions, volatile stock markets, and government layoffs have all weighed on consumer and business sentiment, prompting many to delay discretionary spending and major purchases.
In sum, while the fear of tariffs has spurred some consumers to accelerate major purchases, particularly in the auto sector, the broader picture is one of caution and delayed spending. The U.S. consumer remains deeply concerned about the future, carefully managing household budgets as they navigate a landscape filled with uncertainty and volatility. Retailers, manufacturers, and airlines alike are bracing for a more subdued consumer environment in the months ahead.
READ MORE: