Across the United States, a rush of consumers is prompting car dealerships to see a surge in new vehicle sales as shoppers anticipate upcoming price increases attributed to tariffs. Reports indicate that some individuals are even advancing the purchase of electronic devices, such as iPhones, in response to these economic changes.
However, this trend of urgency is not reflected in all sectors. Retailers are not experiencing a widespread increase in early purchases driven by tariffs, with current surveys indicating a general consumer unwillingness to spend. Instead, many shoppers appear to be postponing their purchases, opting for a more cautious approach, as per recent findings from market research and the Federal Reserve.
The Federal Reserve’s latest Beige Book report, released on Wednesday, shows overall consumer spending, excluding automobiles, has declined nationally. Economic activity varied significantly across regions, with five districts reporting slight growth, four experiencing modest declines, and three maintaining consistent trends from previous months.
While vehicle sales and certain non-durable goods showed moderate to strong performance—likely due to consumer anticipation of upcoming tariff-induced price increases—both leisure and business travel continue to lag. The report emphasized that uncertainty surrounding international trade policies is a common concern across many districts.
Despite some significant purchases potentially being affected by introduced tariffs, initial data hints that the imminent duties have heightened consumer vigilance regarding their expenditures as they await further developments regarding trade policies. Major corporations, from Chipotle to PepsiCo and American Airlines, have acknowledged observing slower spending trends among consumers this week.
According to Steve Zurek, vice president of thought leadership at NielsenIQ, U.S. shoppers are increasingly adopting a “conservation mentality” in their finances, influenced by fluctuating market conditions and headlines. “There’s so much uncertainty right now that shoppers just don’t know what to do,” he commented. “All they can do is manage their household budgets as best as they can.”
Supporting the notion of consumer hesitancy, a NielsenIQ survey indicated that approximately 35% of respondents intend to delay major purchases—such as homes, cars, appliances, or furniture—due to tariffs. In contrast, only 7% of those surveyed planned to make significant purchases now to avoid potential price hikes later on. This survey was executed just before tariffs were announced by Trump in late March, which were subsequently modified for a 90-day period.
Additionally, recent data from the National Association of Realtors shows that rising mortgage rates contributed to a decrease in home sales in March, marking the slowest pace since 2009.
Businesses across retail, aviation, and automotive sectors are keenly observing consumer behaviors to foresee demand fluctuations and manage their inventory orders effectively. Some companies have already increased their orders for durable goods, anticipating heightened costs due to tariffs.
Turning to early purchasing behaviors amid tariff apprehensions, the auto industry stands out significantly.
In March, sales within the automotive sector robustly outperformed other retail categories, with overall sales excluding vehicles and parts rising by 0.5%, while auto sales surged by 5.3%, according to the Commerce Department. Although Trump alleviated some tariffs on select nations that export goods to the U.S., a 25% tariff on all imported vehicles remains in place.
To circumvent potential price inflation, consumers are flocking to car showrooms in hopes of securing better deals. Cox Automotive estimates that the 25% tariff on non-U.S. assembled vehicles will inflate the average cost of imported cars by $6,000. Furthermore, vehicles assembled domestically should see a price increase of about $3,600 due to upcoming tariffs on automotive parts, compounded with prior steel and aluminum tariffs that added $300 to $500 onto vehicle prices.
Once Trump reaffirmed these tariffs, automotive executives and dealers reported a noticeable spike in showroom traffic and sales. “Concerns about potential future vehicle prices due to tariffs led to a surge in March sales, and April started similarly strong,” said Charlie Chesbrough, a senior economist at Cox Automotive. The pace of new vehicle sales is reported to be 22% higher than the seasonally adjusted rate from last year, with over an 8% increase in volume through early April, according to Cox’s data.
Chesbrough added that while recent sales figures are promising, there is apprehension that once inventories free of tariffs are depleted, sales may plummet. “Inventory levels have significantly declined in recent weeks, likely leading to higher vehicle prices,” he noted. “Therefore, conditions at the end of April may not sustain this momentum.” Consumer sentiment has not been optimistic, causing challenges for future auto sales forecasts.
In a survey conducted by GlobalData among nearly 5,800 adults, automotive purchases emerged as the most common category expedited due to tariff anxiety, with about 12% of respondents reporting an accelerated purchase decision for vehicles. Approximately 10% indicated they hastily bought furniture, while close to 9% did the same for large electronic items.
Conversely, there has not been an observable surge in stockpiling for a broader range of products such as clothing or paper goods. Walmart’s CFO, John David Rainey, reported earlier this month that typical consumer purchasing patterns have not mirrored the panic buying seen during the pandemic, leading to unpredictability in sales week by week.
Rainey did note that despite sporadic bulk orders in response to past events, recent consumer behavior has remained largely stable, although he labeled the overall volatility in spending patterns as atypical.
Chris Nicholas, CEO of Sam’s Club, corroborated that the warehouse retail chain has not detected any significant changes in early purchases of items like appliances and electronics. The staggered timing of Easter this year has also muddled sales trends, with total spending from the beginning of April reflecting a 3.8% increase, compared to an estimated 2.7% in March, largely attributed to pre-Easter shopping habits.
Even with the Easter influence, some argue that tariffs have contributed to early purchasing patterns in April, along with a noted uptick in store traffic across various sectors. However, visits to home improvement and furniture stores have suffered a year-over-year decline.
As consumers navigate through everyday purchases—from laundry detergent to airline tickets—executives indicate that the tariffs are fostering a reluctance to spend and a heightened focus on seeking out bargains. Procter & Gamble CFO Andre Schulten highlighted on a recent call that a “nervous consumer” has led to a pullback in spending in recent months, with shoppers exhibiting a clear preference for value-oriented options.
These price-sensitive consumers have reduced their domestic air travel bookings as well, pushing airlines to resort to fare promotions while also reducing flight schedules. Airfare has reportedly decreased by 5.3% in March, compounded by a previous 4% decline in February.
Several airline executives express concern about a steady decline in demand for business travel—particularly among government and corporate sectors—amid economic turbulence. Delta Air Lines’ CEO, Ed Bastian, remarked in early April that business travel, which had previously increased by 10%, has now stagnated.
As compact airline operations adapt to this shifting demand, American Airlines recently joined several other carriers in retracting its financial outlook for 2025, citing notable weakness in sectors sensitive to economic conditions.
Even amidst these challenges, there remains some resilience in high-end travel. However, airlines such as Alaska and American Airlines are taking cautious measures, with price cuts expected to fill seats amid softer demand.
NielsenIQ’s Zurek predicts that a sound focus on saving over spending will dominate consumer behavior in the upcoming months due to looming economic uncertainties. Throughout the pandemic, savings rates increased as spending opportunities decreased.
For example, Dallas resident Tiffany Armstrong has postponed her kitchen remodeling plans until she gains clarity on the cost of necessary appliances and materials. “Between the uncertainty with pricing and the stock market, it doesn’t seem like a wise time,” she reasoned. Nonetheless, she made an exception to purchase a new iPhone earlier than intended, only for the situation to shift days later when it was revealed that Apple iPhones would be exempt from tariffs.
— Finance Newso’s Amelia Lucas contributed to this report.
