While headline economic indicators continue to suggest stability in the U.S. economy, a growing body of evidence points to a different reality for millions of Americans struggling to afford basic necessities. New research from the Federal Reserve Bank of New York has found that food insecurity is increasing sharply across the country, reaching levels not seen since the height of the COVID-19 pandemic and exposing deep economic divides that aggregate statistics often fail to capture.
The analysis, released this week by researchers at the New York Fed, examined responses from the Survey of Consumer Expectations and found what researchers described as “a remarkable increase in food insecurity, particularly among lower-educated and lower-income households and households with young children,” alongside “a contemporaneous increase in pessimism among the same groups, along with a sharp decline in job-finding expectations.”
The findings arrive amid mounting concerns about the economic pressures facing working-class and lower-income Americans as inflation remains elevated, household purchasing power weakens, and federal nutrition assistance programs have been reduced. According to the report, rising prices for essentials such as groceries, housing, utilities, and fuel are placing disproportionate pressure on households already struggling to make ends meet.
Researchers framed their findings within what they described as a “K-shaped” economy, a term used to illustrate how economic fortunes have increasingly diverged between higher-income households and those with fewer resources. While wealthier Americans have benefited from rising stock prices, increased home equity, and strong asset appreciation, many lower-income households continue to face persistent financial hardship.
The report notes that consumers overall have become increasingly pessimistic about their financial futures despite what it characterizes as “solid economic fundamentals.” Current levels of consumer sentiment, researchers wrote, have fallen to levels comparable to or below those seen during the Great Recession and the pandemic.
The contrast between economic data and lived experience has become increasingly apparent. According to the New York Fed, many lower- and middle-income households have experienced higher effective inflation rates because a greater share of their spending is concentrated in necessities whose prices have risen substantially since the pandemic. Housing, groceries, and utilities have consumed larger portions of household budgets, forcing many families to cut back on food purchases and draw down savings.
To better understand these pressures, the Survey of Consumer Expectations asked households whether they had experienced several indicators of financial stress during the previous three months. These included dipping into savings or emergency funds, having trouble finding enough food to eat, receiving food donations from family members or food banks, and receiving Supplemental Nutrition Assistance Program benefits.
The results showed significant increases in all four categories compared with previous survey periods. The increases were observed across demographic groups but were particularly pronounced among lower-income households, lower-educated households, non-white households, and households with children.
The findings mirror broader federal data documenting a resurgence in food insecurity. According to the report, the U.S. Department of Agriculture’s most recent survey found that 13.7 percent of households experienced food insecurity in 2024. Among households with children, the rate reached 18.4 percent. Researchers noted that while these figures remain below the post-2001 peak of 14.9 percent recorded in 2011, they are significantly higher than the post-2001 low of 10.2 percent recorded in 2021.
The consequences of food insecurity extend far beyond hunger itself. The report notes that food insecurity is associated with poor health outcomes, lower educational attainment, reduced worker productivity, and lower lifetime earnings. For families with children, the implications can be especially severe as nutritional instability affects educational performance and long-term development.
The New York Fed analysis also found a strong relationship between food insecurity and deteriorating consumer confidence. Households reporting food insufficiency, receipt of food donations, or participation in SNAP were considerably more pessimistic about their future financial circumstances than other respondents.
Researchers found that among those reporting incidents of food insufficiency and food assistance, “there is a lower, and more rapidly declining, net share of respondents expecting to be better versus worse off financially a year from now.” They concluded that “an increase in the incidence of food insecurity is associated with a deterioration in consumer sentiment.”
Among respondents who reported not having enough food or skipping meals, expectations about future financial well-being deteriorated dramatically. Similar declines were observed among households receiving food donations and SNAP benefits.
The study also found that food insecurity was associated with declining confidence in the labor market. Respondents experiencing food hardship reported substantially lower expectations of finding a new job if they were to lose their current employment. These declines were considerably larger than those reported by the overall population, suggesting that households facing food insecurity are also becoming increasingly uncertain about their economic prospects.
At the same time, households experiencing food insecurity continued to report significantly higher expectations of debt delinquency than the broader population. While overall delinquency expectations remained relatively stable over the study period, respondents facing food shortages consistently anticipated greater difficulty meeting debt obligations.
The findings coincide with additional economic data suggesting that financial pressures are intensifying for many Americans. Following the release of new federal data, the nonprofit research organization Equitable Growth highlighted what it described as “an important milestone: Household incomes are now down year-over-year. American households had more money to spend in April of 2025.”
Austin Clemens, a visiting fellow with Equitable Growth, noted that the decline has been particularly severe among lower-income households.
“Although income is down for all households this month, it is falling faster for the bottom 50% households, who have seen their income fall by 1.6% compared to April of last year,” Clemens said. “This group’s income has fallen in five of the last six months.”
The Federal Reserve researchers suggest that rising food insecurity may help explain why consumer sentiment has remained unusually weak even while broader economic indicators have appeared relatively strong. The report notes that traditional measures such as unemployment rates, household wealth, and consumer spending can obscure significant disparities between different segments of the population.
While the analysis does not establish a direct causal relationship between food insecurity and declining consumer confidence, researchers concluded that the connection is difficult to ignore. As more households report relying on food assistance, skipping meals, and struggling to afford necessities, confidence in future financial stability appears to be eroding as well.
The report concludes that “the observed positive association between food insecurity and overall consumer pessimism, together with the increase in the incidence of food insecurity, especially among households at the bottom of the K-shape, point 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.”
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