August Beige Book Reveals Widespread Strain Among Working Families

WASHINGTON, D.C. – The Federal Reserve released the latest edition of the Beige Book this week, providing an updated snapshot of economic conditions across all 12 Federal Reserve Districts. The report adds to the mounting evidence that families are under substantial financial pressure: high gas prices are raising the cost of getting to work and more households are using credit cards to cover basic necessities. Rising health care costs are also causing some patients to delay or skip care.

Trump’s economic policies are behind many of the financial hardships showing up across the Beige Book. His war in Iran has pushed up the price of gas, while stricter Supplemental Nutrition Assistance Program (SNAP) requirements enacted through the 2025 GOP budget law are making food assistance harder to access for families already struggling with grocery bills. Congressional Republicans also allowed enhanced Affordable Care Act subsidies to expire in January, driving painful increases to what families pay for premiums and deductibles.

Today’s report paints a clear picture of the economic consequences of Trump’s policies for working families.

Groundwork Collaborative’s Senior Vice President of Policy, Advocacy, and Research, Alex Jacquez, reacted with the following statement:

“Under President Trump, a full-time job and regular paycheck won’t make ends meet for working families. Everything – gas, groceries, health care – is more expensive as a direct result of this president’s policies. No matter how much overtime you work, or how many side hustles you pick up, Trump’s economy is a complete and total failure for working families who are just trying to afford the basics.”

To speak with Alex or any of Groundwork’s experts about what the Beige Book tells us about consumers struggling in Trump’s economy, email press@groundworkcollaborative.org.

BACKGROUND

The Federal Reserve’s Beige Book plays a critical role in informing monetary policy decisions by highlighting regional economic conditions gathered from contacts at businesses, banks, and community organizational contacts at each of the 12 Federal Reserve Districts. Economists have found that the Beige Book can offer early signals about turning points in the economy, including rising recession risks. In the August edition of the Beige Book, contacts reported that:

• Soaring gas prices are making it more expensive to get to work and pulling customers away from stores and restaurants. Trump’s war in Iran has pushed gas above $4.00 per gallon, leaving households with less to spend on necessities.
  • In the Kansas City District, contacts reported that households have “redirected funds from rent, utilities, and food while taking on additional debt.” Some people are skipping medical appointments because they cannot afford transportation.
    • Higher gas prices are hitting rural households especially hard. A contact illustrated this by describing “a client who has a 100-mile commute, now spends $100 per week on gas, and must work overtime to cover it.“
  • Employers in the New York District are struggling to find and retain workers as high transportation, housing, and childcare costs keep people from entering the workforce.
  • Contacts in the Philadelphia and Richmond Districts said that higher fuel prices contributed to “an overall slowdown in shopper traffic.”
  • In the Chicago District, “contacts said restaurant traffic had slowed because of higher food and gas prices.”
• More households are turning to debt and tapping savings to cover everyday expenses. As widespread price increases stretch household budgets, families are depending on credit cards and loans just to make ends meet.
  • Contacts in the Atlanta District reported that “many individuals and families have increasingly relied on debt – including credit cards, payday loans, and ‘buy now, pay later’ services to cover essential expenses.”
  • In the Kansas City District, families depend on credit cards to cover necessary expenses between paychecks.
  • A wealth-management professional in the Minnesota District noted that “spending among some lower-income individuals was being sustained by increased borrowing, including 401(k) loans.”
• Districts report that AI is reducing demand for entry-level and administrative workers. The Beige Book suggests that AI is shifting staffing demand rather than causing a broader pullback in hiring.
  • An employment agency in the New York District said employers were showing less demand for entry-level tech and administrative support workers, “in part due to AI.”
  • One bank in the Philadelphia District said automation has allowed it to scale back hiring for back-office roles and concentrate more heavily on customer-facing positions.
  • Some Richmond District employers said AI is helping them operate more efficiently, leading one financial institution to reassess its entry-level staffing.
  • Contacts in the Cleveland District reported “a reduced need for administrative staff due to AI”, while others hired staff to build out their AI capabilities.
• Rising health care costs are pushing patients to cut back on care and hospitals to cut back on spending. Sweeping health care cuts, including the Republican budget law’s gutting of Medicaid and the expiration of enhanced health care subsidies, and rising insurance premium costs are leaving patients with higher bills, employers with higher benefit costs, and hospitals with fewer resources.
  • In the Dallas District, hospitals reported that the expiration of enhanced Affordable Care Act tax credits has sharply raised premiums and deductibles, leading patients to use fewer elective services and struggle to pay emergency room bills. Hospitals are responding by “slowing hiring and capital investment.”
  • Contacts in the Cleveland District described health insurance costs as a growing expense, with one contact calling the pace of increases “unsustainable.”
  • The San Francisco District noted a rise in uninsured people, “increasing the need for health-care assistance.” One insurance contact said providers and insurers were raising prices to offset reduced federal funding.
  • Service and retail industry employers in the Cleveland District reported continued increases in health insurance benefit costs, with one noting that the pace was “unsustainable.”
• Cuts to the social safety net are already increasing pressure on families and the organizations that serve them. Across districts, nonprofits and community groups are bracing for higher demand and less funding as federal and state policy changes take effect.
  • The Dallas District expects SNAP cuts to increase food insecurity, while community organizations anticipate “higher demand with no corresponding increase in resources.”
  • Community organizations in the San Francisco District continued to report high demand for help with food, housing, and utility bills.
  • Nonprofits in the St. Louis District reported worsening conditions as corporate donations fell sharply over the past six months.
  • Nonprofits in the Philadelphia District remain worried that changes in federal and state policy will reduce the funding available to serve their communities.