By PYMNTS | October 14, 2026
Highlights
Most Federal Reserve districts reported little or no change in consumer spending, and more than half said high-income households supplied much of the spending.
The PYMNTS Consumer Expectations Index fell for a second month, while its measure of economic and buying conditions dropped below neutral.
More than half of consumers said their savings would cover no more than three months if their income stopped.
Consumers have kept the economy moving without a boost in confidence about where it is headed.
The Federal Reserve’s October Beige Book, released Wednesday (Oct. 14), found economic activity increased in nine of its 12 districts, but consumer spending showed less momentum, depending on where one looks. Most districts reported little or no change in spending, while five of the six districts reporting on auto sales described them as flat to modestly lower. More than half said consumer spending was being driven by high-income households.
The findings correspond with a split in consumer confidence measured before the Fed completed its latest round of interviews.
The PYMNTS Intelligence report “Consumers Hold the Line as Their Financial Cushion Shrinks” found in September that the PYMNTS Consumer Expectations Index fell 0.7 points to 54.1, its second consecutive monthly decline. The index remained above the neutral level of 50, but the Macroeconomic and Buying Climate subindex fell 2.2 points to 45.
Consumers were less positive about the economy and whether it was a good time to make major purchases even though their assessment of their own finances changed little. The Personal Financial Resilience subindex, which includes savings, debt and day-to-day money management, was nearly unchanged, according to the report.
The Beige Book recorded a similar separation between continued spending and greater caution over purchases.
In New York, for example, consumer spending edged higher, supported by high-income households. Elevated energy costs, tariffs and high interest rates weighed on consumers and businesses, while the pace of selling price increases picked up.
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Atlanta reported slight growth in consumer spending, but high-end retail accounted for the strength while demand in other value tiers was flat or contracting. Discretionary spending declined as fuel and food costs put additional pressure on low- and moderate-income consumers. Restaurants reported fewer customers, lower average spending and greater use of promotions.
Kansas City offered some of the clearest examples of changes in household purchasing decisions. Consumer spending declined modestly across most retail sectors. Contacts said households were eating at home more often, trading down in quality and abandoning planned purchases as fuel prices reduced purchasing power.
Cleveland reported that consumer spending was flat after four consecutive reporting periods of decline. Auto dealers cited soft demand, while one said customers were limiting vehicle maintenance to the “bare minimum to keep the vehicle safe.”
PYMNTS Intelligence found broad deterioration in consumers’ assessment of the economic environment. The Macroeconomic and Buying Climate measure declined by more than one point for every demographic group tracked in September, including consumers living paycheck to paycheck and those who were not. According to the report, 85% of respondents said their essential expenses had increased during the previous year.
Savings provide another measure of how much capacity households retain if conditions worsen. Some 51.8% of consumers said their savings would support their current lifestyle for three months or less if their income stopped, the report found. Measures of financial emergency readiness, debt manageability and savings capacity changed little during September, even as the duration consumers said their savings could support them declined.
Businesses are also reporting limits on how they respond to higher costs.
The Beige Book said price growth was strong nationally. Federal Reserve observations from Cleveland reported robust selling price increases as businesses passed through higher input costs, although some restaurants and grocers limited increases because of customer price sensitivity and competition.
The Fed’s district reports and the PYMNTS Intelligence index measure the consumer from different directions. Businesses are seeing households alter purchases in response to prices, while consumers report that their own finances remain relatively stable even as their confidence in the economy and buying conditions declines.
The Beige Book now shows what some of that caution looks like in actual purchasing decisions, including fewer discretionary purchases, trading down, postponing purchases and greater sensitivity to price increases.