New York Fed flags rising food insecurity as risk to U.S. consumer outlook

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NY Fed on food insecurity

Highlights

The New York Fed reports a marked rise in food insecurity between October 2025 and February 2026, especially among nonwhite, lower-income, and lower-educated households with children.
Survey findings signal worsening household financial stress as inflationary pressures persist, government support recedes, and delinquency rates on credit cards, auto loans, and student loans remain elevated.
Diverging consumer experiences highlight a K-shaped U.S. economy, with wealthier Americans benefiting from asset gains while middle- and lower-income households face increased pessimism and declining job expectations.

Survey findings point to growing household strain

As reported by the Federal Reserve Bank of New York, economists said in a blog post on Wednesday that food insecurity is rising markedly, particularly among lower-educated and lower-income households and among households with young children.

The bank said its survey asks Americans whether they have recently used savings to cover expenses, struggled to find enough food, skipped meals, or received public or private food assistance. It found that between October 2025 and February 2026 there are meaningful increases in the share of households reporting those conditions.

The increases are broadly spread across race, age, income and education groups, but the bank said they are generally larger for nonwhite households, lower-income and lower-educated households, and households with children. Economists at the New York Fed said the pattern coincides with a rise in pessimism among lower-income households and a sharp decline in expectations of finding a job.

K-shaped economy adds pressure to consumer mood

The findings add to a series of releases describing a K-shaped U.S. economy, in which wealthier households and financially strained Americans are experiencing diverging conditions. The food insecurity data comes from the New York Fed's Survey of Consumer Expectations, which is better known for tracking inflation expectations, with food-related questions asked in 2020, 2025 and February 2026.

Wealthier Americans are supported by higher asset values linked to the stock market, a stable labor market and lower home borrowing costs. At the same time, inflation pressures that have persisted since the COVID-19 pandemic continue to weigh on many households, while government support has receded and delinquency rates on credit cards, auto loans and student loans remain high.

The report said financial stress is showing up in affordability concerns tied to the high cost of living, persistent inflation and high interest rates. It also suggests that the gap between relatively solid hard economic data and unusually weak consumer sentiment may be explained in part by the worsening conditions facing middle- and lower-income households.

In our earlier article on rising U.S. mortgage rates, we reported that home-loan borrowing costs climbed to their highest level in nine months as oil-driven inflation worries rippled through markets. We noted that the jump in rates was already cooling mortgage applications and reinforcing expectations that the Federal Reserve could keep policy tighter—or even consider a hike—if price pressures persist.

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