Food-related challenges are surging for America’s least well-off residents, and that likely explains the marked rise in a sour consumer mood despite data showing the economy is overall doing pretty well, new research from the Federal Reserve Bank of New York says.
“We find a remarkable increase in food insecurity, particularly among lower-educated and lower-income households and households with young children,” bank economists wrote in a blog posting on Wednesday. Mounting food-related issues also track a “contemporaneous increase in pessimism” among lower-income households and a “sharp decline in job-finding expectations.”
The New York Fed said it surveyed Americans on whether they had recently used savings to cover expenses, had trouble finding enough food to eat or skipped eating altogether, or had received some form of public or private food assistances. It found that “between October 2025 and February 2026, there have been meaningful increases in the shares of households reporting” facing those conditions.
“The increases were mostly broad based across race, age, income, and education groups, but were generally larger for nonwhites, lower-income and lower-educated households, and households with children,” the bank economists wrote.
The “association” between food-related challenges and sour consumer sentiment data among lower-income households points “to a potential explanation for the unusually low recent levels of consumer sentiment at a time when the hard economic data paint a more positive picture.”
DIVERGENT PROSPECTS
The New York Fed report is the latest set of findings from a series of releases detailing the so-called K-shaped economy, where the economic fates of the wealthy and those who are not have been diverging.
The data on food insecurity was derived from the bank’s long-running Survey of Consumer Expectations, which is most closely watched for its findings about inflation expectations. Survey respondents were asked specifically about food issues in polls done in 2020, 2025 and in February 2026.
Wealthy Americans have been buoyed by rising asset values tied to the stock market, a stable job market and lower home borrowing costs.
Meanwhile, the high inflation pressures that have prevailed since the COVID-19 pandemic have kept pressure on many Americans, as key forms of government support have been in retreat. Much of America’s current economic strength rests on the spending power of the wealthier economic class.
“The bottom of the K-shape represents a significant share of the middle- and lower-income population experiencing elevated levels of economic uncertainty and financial hardship,” the bank’s report said. “Such financial stress is reflected in concerns about affordability due to the high cost of living, persistent inflation, and high interest rates, and in high delinquency rates for credit cards and auto and student loans.”
Pessimism over the economy has emerged as a notable trend in recent months, as inflation pressures have heated up again driven by President Donald Trump’s large-scale import tax increases and his Middle East war that has caused a sizable energy shock joined with increased uncertainty over the future of the economy.
Households have also been stressed by the shift of the job market into a low-hire, low-fire scenario that follows what had been a hot hiring sector during the pandemic and its aftermath.
