EconomyxAI · Beige Book Sector Monitor February 2024Released March 6, 2024 |
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Conditions index −0.06 avg of 11 sectors, −2 to +2 |
| Outlook index +0.14 sectors with an outlook |
| Districts growing 8/12 per National Summary |
| Positive momentum 5/11 sectors improving |
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This release in brief The read | ■ | Released March 6, 2024, with information collected on or before February 26, 2024. | | ■ | Activity increased slightly; eight districts reported slight to modest growth, three no change and one slight softening. | | ■ | Consumer spending on retail goods inched down amid price sensitivity; air travel robust; manufacturing largely unchanged. | | ■ | Residential demand picked up as mortgage rates moderated; CRE weak except data centers and industrial; outlook generally positive. |
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Sector prospects Where the 3–12 month view points Strongest prospects Real Estate
XLRE ▲ Improving | +0.55 |
| Industrials
XLI ▲ Turning up | +0.24 |
| Financials
XLF ▶ Steady | +0.11 |
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| Weakest prospects Consumer Discretionary
XLY ▼ Turning down | −0.22 |
| Materials
XLB ▶ Steady | −0.09 |
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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 | Real Estate XLRE | | +0.55 | Favorable | +0.38 | +0.50 | ▲ +1.11 | | 2 | Industrials XLI | | +0.24 | Leaning Favorable | −0.18 | +0.50 | ▲ +0.35 | | 3 | Financials XLF | | +0.11 | Neutral | −0.47 | +0.50 | ▶ +0.14 | | 4 | Health Care XLV | | +0.11 | Neutral | +0.21 | +0.00 | ▶ +0.21 | | 5 | Information Technology XLK | | +0.07 | Neutral | +0.02 | +0.00 | ▲ +0.26 | | 6 | Utilities XLU | | +0.03 | Neutral | +0.13 | +0.00 | ▶ −0.03 | | 7 | Communication Services XLC | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 8 | Consumer Staples XLP | | −0.01 | Neutral | +0.00 | +0.00 | ▶ −0.04 | | 9 | Energy XLE | | −0.05 | Neutral | −0.10 | +0.00 | ▶ −0.21 | | 10 | Materials XLB | | −0.09 | Neutral | −0.26 | +0.00 | ▶ −0.18 | | 11 | Consumer Discretionary XLY | | −0.22 | Leaning Unfavorable | −0.36 | +0.00 | ▼ −0.46 |
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; eight districts grew slightly to modestly. | Employment rose at a slight to modest pace; tightness eased further. | | Inflation Pressure (higher = headwind) | | +0.50 |
Price pressures persisted with some moderation; harder to pass through costs. | Loan demand stable to down; credit quality generally healthy. | Outlook generally positive with stronger demand and easier financial conditions expected. |
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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 | · | · | · | | Health CareXLV | · | · | · | · | · | · | · | · | · | · | · | +1 | | FinancialsXLF | · | −1 | · | +1 | · | −1 | −1 | · | · | · | −1 | · | | Consumer DiscretionaryXLY | · | −1 | −1 | · | −1 | +1 | −1 | −1 | −1 | · | −1 | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | · | −1 | −1 | +1 | · | −1 | · | · | +1 | −1 | · | · | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | −1 | · | · | +1 | −1 | · | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | · | +1 | · | · | +1 | −1 | · | −1 | · | −1 | +1 | +1 | | MaterialsXLB | · | · | · | · | · | · | −1 | · | +1 | · | · | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Consumer Discretionary −1 broad−based New York, Philadelphia, Richmond, Chicago, St. Louis, Minneapolis, Dallas Retail spending inched down; households traded down. Why it matters: Drags Discretionary. | Consumer Discretionary +1 Atlanta District tourism strong. Why it matters: Partial offset. | Real Estate +1 New York, Richmond, San Francisco, Dallas Housing picked up as mortgage rates moderated. Why it matters: Lifts Real Estate. | Real Estate −1 Atlanta, Kansas City, St. Louis CRE conditions declined. Why it matters: Partial offset. | Financials −1 New York, Atlanta, Chicago, Dallas Loan demand weakened. Why it matters: Financials drag. | Financials +1 Cleveland Loan demand stabilized. Why it matters: Partial offset. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Increased at a slow pace. |
| New York Flat Outlook ▲ Flattened after weakness. |
| Philadelphia Contracting −0.5 Outlook ▶ Resumed a slight decline. |
| Cleveland Growing +0.5 Outlook ▲ Increased slightly. |
| Richmond Flat Outlook ▶ Little growth. |
| Atlanta Growing +0.5 Outlook ▲ Little changed. |
| Chicago Growing +0.5 Outlook ▲ Increased modestly. |
| St. Louis Growing +0.5 Outlook ▲ Increased slightly. |
| Minneapolis Growing +0.5 Outlook ▶ Up slightly. |
| Kansas City Flat Outlook ▶ Stable. |
| Dallas Growing +0.5 Outlook ▲ Expanded modestly. |
| San Francisco Growing +0.5 Outlook ▶ Grew slightly. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — broad -1 retail reads turn Discretionary negative after the holiday lift.
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| | Real Estate — housing improvement in large-weight districts lifts Real Estate toward neutral.
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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 |