On Long Island, concerns about economy as stock markets sink, tariffs take hold

A blizzard of bad news about tariffs, inflation and tumbling stock prices rattled many Long Islanders this week.

To wit: This week saw the S&P 500 have its worst day since the 2020 start of the COVID-19 pandemic, the world’s biggest economies appeared headed for a bare knuckle trade war, and Federal Reserve Chairman Jerome Powell said Friday that the new tariffs would likely lead to higher prices and slower growth.

He also said that “the economy is still in a good place,” citing solid growth, a balanced labor market and moderated inflation, but many Long Islanders, anxious about the cost of living, said in interviews that it didn’t feel that way.

“Things are happening so quickly that investors haven’t had a chance to separate economic worries from stock market worries — it’s just one big, giant basket of worries,” said Mitchell O. Goldberg, president of Melville-based financial advisory firm ClientFirst Strategy Inc..

Long Island has a “large boomer population that’s been investing the last 40 or 50 years and has accumulated a lot of money in the stock market and from equity in their homes,” Goldberg said. Those people may see the value of those investments slump, if they haven’t already, but history shows those investments will rebound in time, he said.

The bigger worry for most Long Islanders of working age is a recession.

“Your greatest asset is at risk, and that’s your gainful employment," Goldberg said. “After recessions, companies reconfigure their business model. They bring on more automation, workers with different skill sets,” and that change can outpace workers’ ability to adapt, he said.

'Have to pinch our pennies'

Among those most affected could be Long Islanders who are retired, or soon will be.

Sarahjeanne Goldstein, 75, a longtime nurse and health care worker from South Setauket who retired March 1, said she's worried that President Donald Trump’s tariff policy would drive up her daily living expenses.

“The tariffs are foolish, and I think they’re punitive,” said Goldstein, who worked at Stony Brook University Hospital for more than 40 years. “I’m worried about food, I’m worried about utilities, I’m worried about gasoline” and sliding stocks, she said.

The child of parents who grew up in the Great Depression, Goldstein said she lived with “this mindset that at any minute, I’m going to be broke.” Phone calls with her financial adviser have not put her at ease. “My financial adviser says I have enough money to survive it, and I believe him but I’m worried,” she said.

Albertson-based elder law attorney Elisa Rosenthal said she feared an economic downturn would hit people like her clients particularly hard.

Many of them are retirees in their 70s and 80s with assets of $1 million to $3 million, she said. But much of that wealth is tied up in their homes, and “You’d be surprised by how fast that goes” after a move to an assisted living facility or nursing home, she said. Those living on fixed incomes are especially vulnerable to higher prices on consumer goods from tariffs, she said.

Rosenthal, who is in her 50s, said she would follow the investment guidance from most financial advisers to wait out the market downturn but was suffering from emotional whiplash. Just months ago, she said, “we had a very robust economy” with double-digit gains in U.S. stock market indices for 2024.

At Tanger Outlets in Riverhead, several shoppers said they feared the coming months would bring higher prices, forcing them to scrimp to pay for essentials.

“I used to sleep really well at night, and now I’m up in the middle of the night at 3 o'clock, and I can’t get back to sleep because everything is going through my head,” said Denise Gotimer of Riverhead, a teaching assistant.

Gotimer, 69, said she had begun to think twice at the grocery store about whether she truly needed, or simply wanted, an item. Retirement no longer felt attainable, she said.

“I’m way past retirement age, and with the tariffs and the economy, I don’t see it happening anytime soon.”

Dedric Curry, 54, of Ridge, owns a trucking business and wedding entertainment company but said he watched his spending more than ever and was trying to economize. He no longer buys lunch, but packs it.

“We don’t know how things are going to turn out, so you have to be mindful of what you spend,” he said. “We still have to pinch our pennies.”

Kathy Taylor, 61, of Mattituck, works as a direct support professional and tends bar to make ends meet.

“Everything’s going up and up and up in price; there’s less money every month to live on," Taylor said. "The grocery store is costing you $100 more a week than it used to.”

'Great time to get rich'

Trump, writing on Truth Social Friday, addressed foreign nationals investing in the United States. "MY POLICIES WILL NEVER CHANGE. THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!" 

Writing about a U.S. jobs report that was better than expected, he appeared to praise his own economic polices: “IT’S ALREADY WORKING. HANG TOUGH, WE CAN’T LOSE!!!” 

On a scale of 100, Long Island consumers’ confidence dropped from 72.9 in late 2024 to 70.2 in March, a Siena College Research Institute poll found, with many concerned about the cost of groceries and housing. That drop mirrored a nationwide decline in consumer confidence measured earlier this year, as Americans’ views about their financial futures fell to a 12-year low, according to the Conference Board.

Steven Kent, chief economist for the Long Island Association business group, said that the region’s economy was relatively stable, but that tariffs could dent consumer spending, which accounts for about 70% of economic activity locally and across the country.

The region’s “relatively low” unemployment rate — 4.1% in February, the most recent month available — and diversity of industries makes the Island more resilient than other parts of the country that rely heavily on international trade, Kent said.

“But as solid as the Nassau and Suffolk economy is, it’s hard to offset what’s going to go on nationally and globally,” said Kent, who is also an  associate professor of economics at Molloy University. 

'Nothing you can do'

The recent stock market drops, Kent said, reflect several major concerns among investors and large corporations: “No. 1 is whether higher expenses from the tariffs lead to lower earnings for all the major publicly traded companies. No. 2 is, if prices go up, the consumer may pull back from spending. That could lead to an economic downturn.”

If Long Islanders delay purchases, particularly larger ones, the results could be troubling for the economy, Kent said.

Residents “may delay renovating part of their home because input costs have increased. They may delay buying a car because the prices have gone up.” As a result, local businesses could lose out, potentially hurting employment levels, he said.

Powell, speaking to journalists in Arlington, Virginia, said the Fed could delay changing interest rates because of the economy’s strength. He said it could take one year to see the effects of higher tariffs, along with the administration’s crackdown on illegal immigration and proposed tax cuts.

“People saying they are unhappy about the economy seems to largely reflect the increase in [prices] that happened when inflation was high in 2021, 2022 and 2023,” Powell said. “Inflation is now back down to much more normal levels. Unemployment is low. The economy has been growing, but people are still experiencing that high price level … Prices don’t go down. [Consumers] are paying much more for the basic necessities of life, and they aren’t happy about it, and that accounts for the negative sentiment.”

That anxiety is not universal.

Michelle Blum, an Amityville resident who owns Nutrish Mish, which gives nutrition counseling to people seeking long-term weight loss, said she had followed the week’s news but did not dwell on it.

“There’s nothing you can do about it,” she said. Instead of getting “caught up in the panic of it all,” she said, she tries to focus on her clients’ needs, making “this service the best it can be.”

James T. Madore reported from Arlington, Virginia.

With The Associated Press