February Beige Book Shows Trump’s Price Hikes Continue to Create Struggles for Consumers, Businesses

The Federal Reserve released its February 2026 Beige Book, providing an updated snapshot of economic conditions across all 12 Federal Reserve Districts. A growing share of districts reported flat or declining activity as economic uncertainty and price sensitivity weighed on consumer spending alongside rising housing and food insecurities.

The report paints a clear picture of rising tariff costs, higher prices for basic necessities, and Trump administration policies disrupting businesses and squeezing working families.

Groundwork Collaborative’s Chief of Policy and Advocacy, Alex Jacquez, reacted with the following statement:

“Trump sold Americans a bill of goods he can’t deliver on, and he owes working families a refund. The president has driven up costs for consumers and businesses alike with his chaotic tariff policies and foreign wars. The Federal Reserve’s report should serve as a major red flag for the White House that Trump’s economy is flailing.”

BACKGROUND

The Federal Reserve’s Beige Book plays a critical role in informing monetary policy decisions by highlighting regional economic conditions gathered from contacts at businesses, banks, and community organizational contacts at each of the 12 Federal Reserve Districts. Economists have found that the Beige Book can offer early signals about turning points in the economy, including rising recession risks. In the March edition of the Beige Book, contacts reported that:

• Tariffs continue to push up costs. Nine Federal Reserve Districts cited rising input prices tied to tariffs, with many firms saying they are passing those increases directly on to customers.
  • A New York food ingredient company reported tariff-driven price increases moving through the supply chain. Some manufacturers are responding by shrinking package sizes while keeping prices the same.
  • In the Cleveland District, one manufacturer raised prices by 4.25% instead of the planned 3% to offset new steel tariffs.
  • Manufacturers in the Chicago District said tariffs are becoming harder to absorb. One firm noted that after splitting the cost with customers last year, they now plan to pass “the full cost on in 2026.”
• Rising prices for basic necessities are squeezing household budgets. As essential expenses rise, more households are cutting back and turning to community support to meet basic needs.
  • Nonprofits in the Philadelphia District reported increased demand for food assistance as many clients struggle to afford basic necessities.
  • In the Boston District, contacts highlighted continued reliance on food pantries driven by high prices for food, rent, and home heating.
  • Contacts in the Atlanta District said rising prices are forcing families to find new ways to stretch their budgets. Households are “selling clothes online, scrapping metal, tapping savings, utilizing buy now/pay later offerings, eliminating dining out, using coupons, and buying in bulk.”
  • Organizations serving low-income consumers in the Chicago District described rising food insecurity and ongoing challenges finding affordable housing.
• Spending patterns reveal a widening economic divide. While higher-income households continue to spend, many lower- and middle-income consumers are cutting back or trading down to cheaper options.
  • Contacts in the San Francisco District described a “bifurcated, or K-shaped, economy.” Discretionary spending remained strong among higher-income households, while lower- and middle-income consumers continued shifting toward lower-cost and store-label alternatives.
  • In the New York District, sales gains were concentrated among higher-income consumers. Even so, many shoppers remained price-conscious and searched across multiple retailers for better prices.
  • Retail patterns in the Atlanta District reflected the same divide. Discount stores reported steady demand from price-conscious shoppers, while higher-end retail sales remained resilient.
• Health care and insurance costs are rising. Contacts pointed to higher premiums, shrinking access to coverage, and growing financial strain on health care providers.
  • In the New York District, contacts said low- and moderate-income households and older adults are facing increasing challenges maintaining health insurance coverage as premiums rise and access to low-cost plans declines.
  • Nonprofits in the Dallas District warned that expiring Affordable Care Act subsidies and changes to Medicaid requirements could lead to a rise in the uninsured. Contacts said the shift could limit access to preventative care while hospitals absorb the cost of treating patients without coverage.
  • In the Kansas City District, contacts warned that many rural hospitals are under severe financial strain. Roughly half are operating at a loss, with several facilities in northern Missouri at risk of closure.