EconomyxAI · Beige Book Sector Monitor February 2005Released March 9, 2005 |
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Conditions index +0.54 avg of 11 sectors, −2 to +2 |
| Outlook index +0.31 sectors with an outlook |
| Districts growing 12/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Released March 9, 2005, with information collected before late February 2005 (date not printed in the PDF). | | ■ | The economy continued to expand at a moderate pace; all twelve districts reported increased activity, with brisk growth in New York and San Francisco, acceleration in Dallas and some deceleration in Richmond. | | ■ | Consumer spending was steady to moderately higher while auto sales softened; tourism was strong in most districts and service industries improved. | | ■ | Manufacturing expanded solidly in most districts, led by defense, machine tools, heavy trucks and construction materials; housing stayed robust while commercial real estate was mixed. | | ■ | Labor markets strengthened in almost every district with spreading skilled-worker shortages; more manufacturers found it easier to pass along price increases. |
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Sector prospects Where the 3–12 month view points Strongest prospects Energy
XLE
▲ Turning up | +0.81 |
| Industrials
XLI
▶ Steady | +0.74 |
| Information Technology
XLK
▶ Steady | +0.52 |
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| Weakest prospects Consumer Staples
XLP
▶ Steady | −0.01 |
| Utilities
XLU
▶ Steady | +0.00 |
| Communication Services
XLC
▶ Steady | +0.06 |
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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 | Energy
XLE | | +0.81 | Favorable | +1.26 | +0.72 | ▲ +0.55 | | 2 | Industrials
XLI | | +0.74 | Favorable | +0.95 | +1.00 | ▶ +0.07 | | 3 | Information Technology
XLK | | +0.52 | Favorable | +0.64 | +0.50 | ▶ +0.51 | | 4 | Consumer Discretionary
XLY | | +0.39 | Leaning Favorable | +0.76 | +0.50 | ▶ +0.16 | | 5 | Materials
XLB | | +0.34 | Leaning Favorable | +0.66 | +0.14 | ▶ −0.05 | | 6 | Financials
XLF | | +0.31 | Leaning Favorable | +0.68 | +0.50 | ▶ −0.08 | | 7 | Real Estate
XLRE | | +0.25 | Leaning Favorable | +0.67 | +0.04 | ▶ +0.06 | | 8 | Health Care
XLV | | +0.11 | Neutral | +0.21 | +0.00 | ▶ +0.03 | | 9 | Communication Services
XLC | | +0.06 | Neutral | +0.07 | +0.00 | ▶ +0.07 | | 10 | Utilities
XLU | | +0.00 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Consumer Staples
XLP | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 |
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 | | +0.75 |
All twelve districts reported increased activity at a moderate pace; brisk in New York and San Francisco. | Labor markets strengthened in almost all districts; skilled-worker shortages in many industries; manufacturers adding workers in five districts. | | Inflation Pressure (higher = headwind) | | +0.50 |
Retail prices flat to modestly up; manufacturers finding it increasingly easy to pass along increases; input pressure easing in some districts. | Steady to somewhat stronger lending; credit quality strong; competitive lending narrowing margins. | Retailers generally optimistic; manufacturers optimistic about continued growth; energy activity expected to keep improving. |
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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 | +1 | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | +1 | +1 | +1 | +1 | · | +1 | · | · | · | · | +1 | | Consumer DiscretionaryXLY | +1 | +1 | +1 | · | · | +1 | · | · | +1 | +1 | +1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | +1 | · | | IndustrialsXLI | +1 | +1 | +1 | +1 | +1 | +1 | +1 | · | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | +1 | · | +1 | +1 | · | +1 | · | · | · | +1 | | MaterialsXLB | · | · | · | · | · | · | +1 | · | +1 | · | +2 | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy +2 Dallas Oil service firms report boom times are back. Why it matters: Largest Energy weight. | Materials +2 Dallas Chemical demand extremely strong, outstripping capacity. Why it matters: Materials strength. | Industrials +1 broad−based Broad-based Manufacturing up in eleven districts. Why it matters: Broad Industrials strength. | Consumer Discretionary +1 New York Tourism exceptionally strong; hotels fully booked. Why it matters: Large Discretionary weight. | Consumer Discretionary +1 broad−based Broad-based Retail up modestly in eight districts. Why it matters: Discretionary positive. | Financials +1 New York Securities activity brisk; bonuses up 15 percent. Why it matters: Largest Financials weight. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Continues to grow. |
| New York Growing +1.0 Outlook ▲ Expansion well maintained. |
| Philadelphia Growing +1.0 Outlook ▲ Increased. |
| Cleveland Growing +1.0 Outlook ▲ Improved across an array of industries. |
| Richmond Growing +0.5 Outlook ▲ Expanded at a somewhat slower pace. |
| Atlanta Growing +1.0 Outlook ▲ Remained quite positive. |
| Chicago Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Continuing signs of modest growth. |
| Minneapolis Growing +1.0 Outlook ▲ Grew moderately. |
| Kansas City Growing +1.0 Outlook ▲ Expanded moderately. |
| Dallas Growing +1.5 Outlook ▲ Showed signs of accelerating. |
| San Francisco Growing +1.0 Outlook ▲ Expanded at a solid pace. |
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Where the signal is thin or split Divergences to watch | Energy — Dallas's +2 carries the largest Energy weight, so the weighted score is far above the simple average.
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| | Industrials — broad +1 readings with no negatives make Industrials steady rather than strong.
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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 |