The Regional Side of the Story: K‑Shaped Pattern in Region, Wider Gap in Gas Spending

Rajashri Chakrabarti, Thu Pham, Beck Pierce, and Maxim L. Pinkovskiy

In this post, we use the inaugural release of our regional consumer spending indicators to ask whether these patterns hold for a significant portion of the Second District, and how regional spending patterns by income have been similar to or different from the national patterns we documented earlier. We find similar K‑shaped patterns in both retail and gas spending in our region as we do in the nation, with the K‑shaped pattern in gasoline in response to the recent gas price shock being more pronounced in the region.

Introducing the Regional Consumer Spending EHIs

This post accompanies the release of the Economic Heterogeneity Indicators (EHIs) through April 2026, which for the first time feature regional consumer spending indicators based on microdata from the market research firm Numerator. These indicators demonstrate our commitment to understanding how economic trends affect different segments of society not just in the nation, but in this region.

To create the regional consumer spending EHIs, we narrow the panel to participants in Numerator’s sample who live in zip codes within a significant portion of the Second District (New York State, northern New Jersey, and Fairfield County, CT. The Numerator panel does not cover Puerto Rico or the Virgin Islands). We verify the demographics of the panel participants to closely match the demographics of the Second District in the American Community Survey (ACS). We also verify that aggregate growth rates of retail spending excluding autos and excluding nonstore spending using the Numerator data for New York State and New Jersey closely match the corresponding growth rates in the Advance Monthly Retail Trade Survey (MARTS ). We are therefore confident that our Second District consumer spending indicators can be trusted to give us accurate trends for different demographic groups within the Second District.

To obtain real Second District spending growth rates, we deflate retail and gas spending by goods-specific demographic prices based on city-level goods-specific CPIs, and goods-specific spending shares for high, middle, and low-income households.

Similar K-Shaped Retail Spending Pattern in the Second District and in the Nation

Sources: Numerator Consumer Spending Data, Consumer Price Index from the Bureau of Labor Statistics via Haver Analytics, and authors’ calculations.​ Regional charts use three-month moving averages.
Notes: Real spending uses corresponding demographic retail prices. Income denotes annual household income. 

The above chart shows nominal and real retail spending ex auto from the EHIs at the national level and for the Second District for high (earning $125,000+ a year), middle ($40,000-$125,000) and low-income (less than $40,000) households, in gold, red, and blue respectively. The high-income households represent approximately one third of all households. Retail spending ex auto in the nation includes nonstore (online) purchases while retail spending ex auto in the Second District excludes nonstore purchases to match the analogous concept in MARTS. Both nominal and real retail spending growth in the Second District show a K-shaped pattern that is very similar to the national trend. In every month, cumulative spending growth since 2023 for high-income households exceeds that for middle-income households, while in almost every month, cumulative spending growth for middle-income households exceeds cumulative spending growth for low-income households.

By April 2026, real retail ex auto ex nonstore spending has grown by 4.7 percent relative to January 2023 for the high-income households in the region, but only by 1.8 percent for the middle-income households and has actually shrunk by 0.6 percent for the low-income households. The difference in real spending growth rates between high and low-income groups in the region is almost the same as it is in the nation.

Nominal Gas Spending Decreased in the Nation but Increased in the Region until February 2026

Sources: Numerator Consumer Spending Data, Consumer Price Index from the Bureau of Labor Statistics via Haver Analytics, and authors’ calculations.​ Regional charts use three-month moving averages. 
Notes: Real spending uses corresponding demographic gas prices. Income denotes annual household income.   

We now turn to  trends in gasoline consumption in the nation and in the region. The above chart shows nominal and real gas station spending in both the nation and the region for high-, middle-, and low-income households. As we are looking at spending in physical gas stations, the exclusion of nonstore spending in the regional data is no longer an issue and the two sets of series are directly comparable. We see that up until February 2026, the gas spending trends in the nation and in the region have been different—nominal gas spending in the region had approximately held steady and real spending, on average, increased by about 10 percent of the January 2023 level, while nominal gas spending in the nation, on average, had actually declined by 10 percent, and real spending had increased by 5 percent.

K-Shaped Dynamics of Real Gas Consumption Even More Pronounced in Region

Sources: Numerator Consumer Spending Data, Consumer Price Index from the Bureau of Labor Statistics via Haver Analytics, and authors’ calculations.​ 
Notes: Real spending uses corresponding demographic gas prices. Income denotes annual household income.   

We now zoom into the last three months of the data to look at real gas consumption trends by income group following the March 2026 gas price  shock. To do this, in the chart above, we present the last three months of the data, indexing each series to 100 in February 2026 to better see how real gas consumption by income group differentially evolved relative to the month before gas prices rose. We see that a similar K-shaped pattern opened up in the region and in the nation. High-income households in the region barely decreased real gas spending (0.5 percent between February and April 2026), while low-income households decreased their gas spending by 9.4 percent, with middle-income households in between. In contrast, low-income households in the nation decreased real gas spending by only 3.2 percent, while high-income households marginally increased real gas spending (by 0.4 percent).

It is notable that the K-shaped pattern is actually even more extreme in the region than it is in the nation, a nearly 9 percentage point difference in real spending changes between high- and low-income households in the region, when such differences in the nation are closer to 4 percentage points. The extreme K-shaped dynamics in the Second District may partially be explained by the greater presence of public transportation, enabling commuters to more easily substitute between driving and taking public transit to work.

Looking Ahead

Having taken a regional view of consumer spending, we conclude that the Second District shares many of the same economic trends that have been affecting consumption in the nation, but with its own unique twist. While K-shaped dynamics have been very similar in the nation and the region over the past three years, the region’s gasoline consumption trends following the March 2026 gas price shock have seen an even greater bifurcation between high- and low-income households, with larger reductions in real gas consumption by lower-income groups. This may be a result of the greater development of public transportation in the Second District. We will continue to monitor how consumer spending evolves for different segments of our society both in the region and in the nation in subsequent releases of the EHIs.

Rajashri Chakrabarti is an economic research advisor in the Federal Reserve Bank of New York’s Research and Statistics Group.  

Thu Pham is a research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

Beck Pierce is a research analyst in the Federal Reserve Bank of New York’s Research and Statistics Group.

Maxim L. Pinkovskiy is an economic research advisor in the Federal Reserve Bank of New York’s Research and Statistics Group.

 
@article{ChakrabartiPhamPiercePinkovskiy2026,
    author={Chakrabarti, Rajashri and Pham, Thu and Pierce, Beck and Pinkovskiy, Maxim L.},
    title={The Regional Side of the Story: K‑Shaped Pattern in Region, Wider Gap in Gas Spending},
    journal={Liberty Street Economics},
    note={Liberty Street Economics Blog},
    number={May 28},
    year={2026},
    url={https://doi.org/10.59576/lse.20260528}
}

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