EconomyxAI · Beige Book Sector Monitor August 2023Released September 6, 2023 |
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Conditions index −0.15 avg of 11 sectors, −2 to +2 |
| Outlook index −0.18 sectors with an outlook |
| Districts growing 7/12 per National Summary |
| Positive momentum 6/11 sectors improving |
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This release in brief The read | ■ | Released September 6, 2023, with information collected on or before August 28, 2023. | | ■ | Most districts indicated modest growth during July and August. | | ■ | Tourism spending surged in a last stage of pent-up demand while other retail slowed, especially non-essentials; manufacturing new orders stable or declining. | | ■ | Housing inventory constrained but single-family construction picked up; loan demand mixed; energy mostly unchanged. |
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Sector prospects Where the 3–12 month view points Strongest prospects Consumer Staples
XLP
▶ Steady | +0.04 |
| Communication Services
XLC
▶ Steady | +0.01 |
| Information Technology
XLK
▶ Steady | −0.02 |
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| Weakest prospects Industrials
XLI
▶ Steady | −0.41 |
| Financials
XLF
▶ Steady | −0.33 |
| Real Estate
XLRE
▶ Steady | −0.26 |
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All 11 GICS sectors, ranked Sector scoreboard | # | Sector | −1 0 +1 | Score | Signal | Now | Outlook | Mom. |
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| 1 | Consumer Staples
XLP | | +0.04 | Neutral | +0.16 | +0.00 | ▶ +0.03 | | 2 | Communication Services
XLC | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.01 | | 3 | Information Technology
XLK | | −0.02 | Neutral | −0.17 | +0.00 | ▶ +0.10 | | 4 | Utilities
XLU | | −0.03 | Neutral | +0.00 | +0.00 | ▶ −0.09 | | 5 | Health Care
XLV | | −0.03 | Neutral | −0.05 | +0.00 | ▶ −0.07 | | 6 | Energy
XLE | | −0.04 | Neutral | −0.39 | +0.00 | ▲ +0.21 | | 7 | Consumer Discretionary
XLY | | −0.09 | Neutral | +0.36 | −0.50 | ▲ +0.22 | | 8 | Materials
XLB | | −0.12 | Neutral | −0.24 | +0.00 | ▼ −0.34 | | 9 | Real Estate
XLRE | | −0.26 | Leaning Unfavorable | −0.10 | −0.50 | ▶ −0.03 | | 10 | Financials
XLF | | −0.33 | Leaning Unfavorable | −0.68 | −0.50 | ▶ +0.20 | | 11 | Industrials
XLI | | −0.41 | Leaning Unfavorable | −0.59 | −0.50 | ▶ −0.26 |
Prospect Score blends current conditions, district outlooks, momentum, a sector-specific macro tilt and margins. Now = weighted current conditions; Outlook = n/a when too few districts gave one; Mom. = change vs the average of the two prior releases. |
National Summary, scored −2 to +2 Macro backdrop | Overall Economic Activity | | +0.50 |
Most districts indicated modest growth in July and August. | Job growth was subdued nationally; hiring slowed but imbalances persisted. | | Inflation Pressure (higher = headwind) | | +0.50 |
Price growth slowed overall, faster in manufacturing and consumer goods; insurance costs jumped. | Loan demand mixed; consumer balances rising with higher delinquencies. | Outlooks fairly stable with fewer recession mentions. |
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Current conditions in each Fed district District by sector | BOS | NY | PHL | CLE | RIC | ATL | CHI | STL | MIN | KC | DAL | SF |
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| Information TechnologyXLK | −1 | · | · | · | · | · | · | · | · | · | −1 | · | | Health CareXLV | · | · | · | · | · | · | · | +1 | · | · | −1 | · | | FinancialsXLF | −1 | −1 | · | −1 | · | +1 | −1 | · | −1 | · | −1 | −1 | | Consumer DiscretionaryXLY | +1 | +1 | −1 | −1 | +1 | +1 | +1 | −1 | +1 | +1 | · | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | −1 | · | −1 | −1 | −1 | −1 | −1 | −1 | +1 | −1 | · | | Consumer StaplesXLP | · | · | · | +1 | · | · | +1 | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | · | · | −1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | · | −1 | · | −1 | · | −1 | +1 | −1 | · | +1 | · | | MaterialsXLB | · | · | · | · | · | · | −1 | · | · | · | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Consumer Discretionary +1 broad−based Boston, New York, Richmond, Atlanta, Minneapolis, Kansas City, Chicago Tourism stronger than expected; autos strong. Why it matters: Lifts Discretionary. | Consumer Discretionary −1 Philadelphia, Cleveland, St. Louis Consumer spending declined; trading down. Why it matters: Partial offset. | Industrials −1 broad−based New York, Cleveland, Richmond, Chicago, St. Louis, Minneapolis, Dallas Manufacturing contracted or slowed. Why it matters: Industrials negative. | Industrials +1 Kansas City Production stabilized as supply chain delays resolved. Why it matters: Partial offset. | Financials −1 broad−based Broad-based Loan demand declined; standards tightened. Why it matters: Financials negative. | Real Estate −1 Boston, Philadelphia, Chicago, Richmond, Minneapolis Office weakness; home sales fell. Why it matters: Real Estate drag. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Expanded modestly. |
| New York Flat Outlook ▶ Held steady. |
| Philadelphia Contracting −0.5 Outlook ▲ Continued to decline slightly. |
| Cleveland Flat Outlook ▶ Generally flat. |
| Richmond Growing +0.5 Outlook ▶ Grew slightly. |
| Atlanta Growing +0.5 Outlook ▶ Grew modestly. |
| Chicago Growing +0.5 Outlook ▼ Increased slightly. |
| St. Louis Flat Outlook ▼ Unchanged. |
| Minneapolis Growing +0.5 Outlook ▲ Crept up. |
| Kansas City Flat Outlook ▶ Stable. |
| Dallas Growing +0.5 Outlook ▶ Modest expansion continued. |
| San Francisco Growing +0.5 Outlook ▶ Strengthened slightly. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — broad +1 tourism reads lift Discretionary despite weakening goods spending.
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| | Industrials — broad-based -1 manufacturing reads make Industrials the weakest cyclical.
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How to read this. Each Fed district’s report is scored −2 (strong contraction) to +2 (strong expansion) for each GICS sector, then weighted by the district’s share of that sector’s activity. The Prospect Score blends current conditions (25%), district outlooks (35%), momentum (20%), a sector-specific macro tilt (10%) and margin pressure (10%). The Beige Book describes regional activity, not earnings or valuations. Weights and sensitivities are illustrative. This newsletter is for information only and is not investment advice. Source: Federal Reserve Beige Book · Scored by EconomyxAI |