The central bank's regional survey found modest overall growth alongside a rising share of households living paycheck to paycheck, as tariff and energy costs cloud the inflation outlook.
The Federal Reserve's Beige Book, released September 2, described economic activity expanding "modestly" nationally, with prices rising "slightly on average" and firms citing "heightened uncertainty and upside risks to inflation" tied to energy costs and anticipated tariffs. Employment "edged up modestly," and wages rose "slightly on average."
Beneath that national summary, the regional detail points to an economy splitting in two. In the Boston Fed's district, luxury spending in New York held up while mid-tier retail growth reflected price increases rather than volume gains, and vehicle sales weakened on affordability concerns. Cleveland recorded its fourth consecutive spending decline, citing higher food and fuel costs. Richmond's upscale hotels posted double-digit revenue growth while smaller retailers reported flat to negative demand, and Atlanta contacts described rising reliance on credit cards, payday loans and buy-now-pay-later financing to cover essential expenses.
Separate data compiled by PYMNTS, not part of the Fed's own report, found the share of households living paycheck to paycheck while struggling with bills rose to 27% from 18% over the prior year. That figure is PYMNTS's own proprietary data, not a Federal Reserve statistic.
The Boston Fed's district summary explicitly linked its more pessimistic outlook to the Middle East conflict, tariff uncertainty and interest-rate concerns, tying this week's Beige Book directly to the same pressures already showing up in gasoline prices and bond markets. The Fed meets September 15-16.