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Carrie and Hurstwood live harmoniously in New York for two years. However, Hurstwood makes a few friends and begins staying out in the evenings. Carrie has no friends of her own, and Hurstwood, thinking that Carrie prefers the domestic life, rarely takes her with him during his evening entertainment. Mr. and Mrs. Vance move in across the hall, and Carrie becomes friends with Mrs. Vance. Carrie notices they are wealthy, and she begins to compare herself to Mrs. Vance. Carrie attends a show with the Vances, and the display of wealth at the theater enthralls her. When she returns to her flat, it now seems insufficient and commonplace. She remembers her old desire to work on the stage.
Carrie attends an evening show with the Vances and their cousin, Mr. Ames. Carrie finds him extremely charming. They eat dinner in a fine restaurant where the exceedingly attentive service and well-dressed patrons give Carrie a taste of the New York high life. Carrie thinks of Ames as an educated man, and she is eager to be agreeable to him. He disdains the ostentatious display of wealth that impresses Carrie as a profound thing. After the show, he returns alone to his lodgings, disappointing Carrie. She wonders if she will ever see him again.
Hurstwood begins to realize what he has lost. He is no longer an important man in important social circles. In the third year, business at the saloon drops off. He tells Carrie they must wait to buy some little things she wants for herself. He irritates her by not consulting her about the purchases he makes for himself. The Vances move out and go on vacation for the summer. The loss of her friend's company and Hurstwood's gloomy mood increase Carrie's restlessness and dissatisfaction.
Hurstwood tells Carrie that he dislikes his current business partner and that he wants to save his money and buy a share in a different business, so they move to a smaller, cheaper flat downtown. She wonders if she has made a mistake in marrying Hurstwood. Meanwhile, the owner of the lot on which his saloon sits sells the building and the land to a new owner who does not want to extend the lease. Hurstwood's partner does not want to re-open the business elsewhere, so Hurstwood's need to get a share in another business becomes even more urgent.
He searches for a new business in which to invest, but everything is either too expensive or too "wretched" for his tastes. The lease on his business runs out, without Hurstwood having found anything new. He has no connections in New York, and he cannot use any of his old ones because of the circumstances of his departure from Chicago. Often, he idles in hotel lobbies, reading the newspaper. During one heavy snowstorm, he spends several days at home reading the paper. He falls ill and loses more time. He also encounters a couple of his old friends from Chicago. Together, these incidents embarrass him and lessen his determination to look for work.
Days pass into weeks. Hurstwood begins pestering Carrie to economize on household expenses. In order to ensure that they spend as little as possible, he begins running all the household errands himself. Carrie notices with dissatisfaction that he skimps on many expenses. She also loses her weekly allowance because Hurstwood does all the shopping. Hurstwood becomes apathetic. He ceases to dress well and neglects his daily grooming. Eventually, he even stops consulting the ads in the papers. Carrie makes a cutting remark about his idleness. They begin sleeping in separate rooms.
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