The Federal Reserve released its February 2026 report Beige bookproviding an updated snapshot of economic conditions in all 12 Federal Reserve Districts. An increasing percentage of districts reported flat or declining activity, as economic uncertainty and price sensitivity weighed on consumer spending along with rising food and housing insecurity.
The report paints a clear picture of rising tariff costs, rising prices for basic necessities, and Trump administration policies that are crippling businesses and squeezing working families.
Head of Policy and Advocacy at Groundwork Collaborative, Alex JaquezShe responded with the following statement:
“Trump has sold Americans a bill of goods he can’t deliver, and he owes working families a refund. The president has caused costs to rise for consumers and businesses alike due to his chaotic tariff policies and foreign wars. The Fed’s report should be a major red flag for the White House that Trump’s economy is faltering.”
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The Fed’s Beige Book plays a critical role in making monetary policy decisions by highlighting regional economic conditions gathered from communications at companies, banks, and community regulatory communications in each of the 12 Fed regions. Economists have found that the Beige Book can provide early signals about turning points in the economy, including rising… Recession risks. In the March edition of the Beige Book, Contacts stated:
- Tariffs continue to raise costs. Nine Federal Reserve districts cited higher input prices tied to the tariffs, with many companies saying they pass those increases directly to customers.
- A New York food ingredients company reported tariff-driven price increases rippling down the supply chain. Some manufacturers are responding by reducing package sizes while keeping prices the same.
- In the Cleveland area, one manufacturer raised prices by 4.25% instead of the planned 3% to offset new steel tariffs.
- Manufacturers in the Chicago area said the tariffs are becoming more difficult to absorb. One company noted that after splitting the cost with customers last year, it now plans to pass on “the full cost in 2026.”
- High prices for basic necessities put pressure on household budgets. As basic expenses rise, more families are cutting back on their expenses and turning to community support to meet basic needs.
- Philadelphia-area nonprofits are reporting increased demand for food assistance as many clients struggle to afford basic necessities.
- In the Boston area, communications highlighted continued reliance on food pantries due to rising prices for food, rent and home heating.
- Contacts in the Atlanta area said rising prices are forcing families to find new ways to stretch their budgets. Households are “selling clothes online, eliminating metals, taking advantage of savings, taking advantage of buy now/pay later offers, eliminating dining out, using coupons, and buying in bulk.”
- Organizations serving low-income consumers in the Chicago area described rising food insecurity and ongoing challenges in finding affordable housing.
- Spending patterns reveal a widening economic gap. While high-income households continue to spend, many low- and middle-income consumers are reducing their spending or turning to cheaper options.
- Contacts in the San Francisco area described a “k-shaped economy.” Discretionary spending remained strong among upper-income households, while low- and middle-income consumers continued to shift toward less expensive and branded alternatives.
- In the New York area, sales gains were concentrated among higher-income consumers. However, many shoppers remained price conscious and searched across multiple retailers for better prices.
- Retail patterns in the Atlanta area reflect the same divide. Discount stores reported steady demand from price-conscious shoppers, while upscale retail sales remained resilient.
- Health care and insurance costs are rising. Contacts cited rising insurance premiums, diminishing access to coverage, and increasing financial pressures on health care providers.
- In the New York area, contacts said low- and middle-income families and seniors face increasing challenges maintaining health insurance coverage as premiums rise and access to low-cost plans declines.
- Dallas-area nonprofits have warned that the end of Affordable Care Act subsidies and changes in Medicaid requirements could lead to a spike in the number of uninsured people. The shift could limit access to preventive care while hospitals bear the cost of treating patients without coverage, contacts said.
- In the Kansas City area, contacts warn that many rural hospitals are under severe financial pressure. Nearly half are operating at a loss, with several facilities in northern Missouri at risk of closing.
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