The Federal Reserve’s October Beige Book reports that the U.S. consumer economy continues to show uneven trends amid ongoing inflation and uncertainty. The Beige Book, a qualitative summary of economic conditions across the 12 Federal Reserve districts, gathers input from business and community contacts nationwide.
Recent weeks saw a modest decline in overall consumer spending. Consumers are showing more sensitivity to prices and are being selective with their purchases. Households with lower and middle incomes are especially cost-conscious, seeking discounts and delaying non-essential purchases. Retailers have noted weaker demand for everyday items such as food, beverages, clothing, and pet supplies.
Affluent consumers, however, have continued spending on premium travel and services. While demand for basic goods like food and clothing has softened among most groups, luxury goods and athletic footwear remain resilient due to higher-income spending.
Restaurants and hospitality businesses face rising costs but also see pushback from customers on higher menu prices. In response, some operators are making changes such as offering smaller portions or adjusting menus.
Retail activity linked to travel has weakened; foot traffic in tourist areas is down. Despite this trend, entertainment venues and quick-service restaurants report growth through targeted promotions.
Tariff-related cost increases continue to affect pricing strategies for retailers. Some have passed these costs onto consumers while others absorb them to stay competitive. Insurance providers report resistance to premium increases; bundling policies is becoming a common strategy in response.
Price pressures persist across sectors due to higher costs for essential goods and services like insurance and healthcare. Many companies pass these increased costs onto consumers—particularly in mid- to high-end markets—while others absorb them where possible.
Overall, the report describes a divided market: high-end segments remain resilient while broader demographics show caution and constraint in their spending habits. The outlook remains mixed with ongoing risks related to inflation, labor availability, and potential fiscal disruptions.