EconomyxAI · Beige Book Sector Monitor February 2023Released March 8, 2023 |
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Conditions index −0.07 avg of 11 sectors, −2 to +2 |
| Outlook index −0.14 sectors with an outlook |
| Districts growing 8/12 per National Summary |
| Positive momentum 8/11 sectors improving |
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This release in brief The read | ■ | Released March 8, 2023, with information collected on or before February 27, 2023. | | ■ | Overall activity increased slightly in early 2023; six districts little changed and six expanded modestly. | | ■ | Consumer spending generally held steady; travel and tourism fairly strong; manufacturing stabilized after contraction. | | ■ | Housing subdued with an uptick along the East Coast; office weak; loan demand declined and standards tightened. |
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Sector prospects Where the 3–12 month view points Strongest prospects Health Care
XLV
▶ Steady | +0.12 |
| Materials
XLB
▲ Turning up | +0.11 |
| Energy
XLE
▼ Weakening | +0.09 |
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| Weakest prospects Information Technology
XLK
▼ Turning down | −0.47 |
| Real Estate
XLRE
▲ Improving | −0.30 |
| Financials
XLF
▲ Improving | −0.20 |
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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 | Health Care
XLV | | +0.12 | Neutral | +0.25 | +0.00 | ▶ +0.25 | | 2 | Materials
XLB | | +0.11 | Neutral | +0.10 | +0.00 | ▲ +0.33 | | 3 | Energy
XLE | | +0.09 | Neutral | −0.04 | +0.50 | ▼ −0.51 | | 4 | Utilities
XLU | | +0.05 | Neutral | +0.13 | +0.00 | ▶ +0.13 | | 5 | Consumer Staples
XLP | | +0.02 | Neutral | +0.06 | +0.00 | ▶ +0.06 | | 6 | Communication Services
XLC | | −0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 7 | Consumer Discretionary
XLY | | −0.04 | Neutral | +0.41 | −0.50 | ▲ +0.28 | | 8 | Industrials
XLI | | −0.04 | Neutral | −0.13 | +0.00 | ▲ +0.05 | | 9 | Financials
XLF | | −0.20 | Leaning Unfavorable | −0.20 | −0.50 | ▲ +0.44 | | 10 | Real Estate
XLRE | | −0.30 | Leaning Unfavorable | −0.69 | −0.50 | ▲ +0.58 | | 11 | Information Technology
XLK | | −0.47 | Leaning Unfavorable | −0.64 | −0.50 | ▼ −0.35 |
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 | | +0.25 |
Activity increased slightly; six districts flat, six modest growth. | Employment grew modestly to moderately despite scattered layoffs and freezes. | | Inflation Pressure (higher = headwind) | | +1.00 |
Inflationary pressures remained widespread though moderating in many districts. | Loan demand declined, standards tightened, delinquencies edged up. | Contacts did not expect conditions to improve much ahead amid uncertainty. |
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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 | · | +1 | | FinancialsXLF | −1 | +1 | · | −1 | −1 | +1 | −1 | · | −1 | −1 | −1 | −1 | | Consumer DiscretionaryXLY | +1 | +1 | +1 | −1 | +1 | +1 | +1 | · | −1 | −2 | −1 | +1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | −1 | · | −1 | · | · | +1 | −1 | +1 | · | −1 | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | +1 | · | · | | EnergyXLE | · | · | · | · | · | +1 | · | · | · | −1 | · | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | −1 | · | −1 | −1 | · | · | −1 | −1 | −2 | −1 | −1 | −1 | | MaterialsXLB | · | · | · | · | · | · | +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, Philadelphia, Richmond, Atlanta, Chicago, San Francisco Retail sales healthy; travel and tourism strong. Why it matters: Lifts Discretionary. | Consumer Discretionary −2 Kansas City Travel and car purchases declined at a rapid pace. Why it matters: Strongest Discretionary negative. | Real Estate −2 Minneapolis Residential real estate continued to crater. Why it matters: Deepest housing read. | Real Estate −1 broad−based Broad-based Housing subdued; office market weak. Why it matters: Real Estate negative. | Financials −1 broad−based Broad-based Loan demand declined and standards tightened. Why it matters: Financials negative. | Information Technology −1 San Francisco, New York, Boston Tech layoffs; information sector weakened; chip sales slowed. Why it matters: Large IT weights. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▶ Increased slightly. |
| New York Flat Outlook ▲ Leveled off after sharp contraction. |
| Philadelphia Growing +0.5 Outlook ▶ Increased slightly. |
| Cleveland Contracting −0.5 Outlook ▼ Contracted slightly. |
| Richmond Growing +0.5 Outlook ▶ Grew at a modest rate. |
| Atlanta Growing +0.5 Outlook ▶ Grew modestly. |
| Chicago Growing +0.5 Outlook ▶ Increased modestly. |
| St. Louis Flat Outlook ▲ Unchanged. |
| Minneapolis Growing +0.5 Outlook ▶ Grew modestly. |
| Kansas City Contracting −0.5 Outlook ▼ Declined slightly. |
| Dallas Growing +0.5 Outlook ▼ Modest growth continued. |
| San Francisco Growing +0.5 Outlook ▶ Expanded modestly. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — broad +1 in large districts lifts the weighted score despite Kansas City -2.
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| | Information Technology — San Francisco -1 carries outsized weight, pulling IT negative.
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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 |