EconomyxAI · Beige Book Sector Monitor January 2001Released January 17, 2001 |
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Conditions index −0.23 avg of 11 sectors, −2 to +2 |
| Outlook index −0.01 sectors with an outlook |
| Districts growing 3/12 per National Summary |
| Positive momentum 0/11 sectors improving |
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This release in brief The read | ■ | Growth slowed further in December, Philadelphia reported an outright decline, and all districts reported weaker manufacturing. | | ■ | Holiday retail sales were disappointing in nearly all districts despite early discounting; auto sales slowed substantially with bloated dealer inventories. | | ■ | Steel producers were in difficulty with bankruptcies in Cleveland and Chicago; Dallas reported a sharp falloff in computer and telecom equipment demand. | | ■ | Residential construction cooled in most districts except New York and San Francisco; energy drilling expanded as fast as rigs and workers allowed. | | ■ | Banks reported no deterioration in credit quality but kept tightening standards; labor markets eased somewhat but stayed tight. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Health Care
XLV
▶ Steady | +0.08 |
| Real Estate
XLRE
▶ Steady | +0.04 |
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| Weakest prospects Materials
XLB
▶ Steady | −0.72 |
| Industrials
XLI
▼ Weakening | −0.70 |
| Information Technology
XLK
▼ Weakening | −0.69 |
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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 | | +0.62 | Favorable | +0.71 | +1.00 | ▶ −0.31 | | 2 | Health Care
XLV | | +0.08 | Neutral | +0.08 | n/a | ▶ −0.09 | | 3 | Real Estate
XLRE | | +0.04 | Neutral | +0.04 | +0.11 | ▶ −0.26 | | 4 | Consumer Staples
XLP | | +0.00 | Neutral | +0.00 | n/a | ▶ +0.00 | | 5 | Utilities
XLU | | −0.01 | Neutral | +0.00 | n/a | ▶ +0.00 | | 6 | Financials
XLF | | −0.06 | Neutral | −0.44 | +0.30 | ▼ −0.51 | | 7 | Communication Services
XLC | | −0.20 | Leaning Unfavorable | −0.07 | n/a | ▼ −0.30 | | 8 | Consumer Discretionary
XLY | | −0.30 | Leaning Unfavorable | −0.23 | −0.22 | ▼ −0.35 | | 9 | Information Technology
XLK | | −0.69 | Unfavorable | −0.50 | n/a | ▼ −1.11 | | 10 | Industrials
XLI | | −0.70 | Unfavorable | −1.07 | −0.42 | ▼ −0.94 | | 11 | Materials
XLB | | −0.72 | Unfavorable | −1.03 | −0.83 | ▶ −0.28 |
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 | | +0.00 |
Most districts reported further deceleration; Philadelphia reported an actual decline and all districts reported weaker manufacturing, while New York and San Francisco stayed solid. | Labor markets eased somewhat but remained tight; layoffs announced in most districts but laid-off workers expected to be quickly reabsorbed. | | Inflation Pressure (higher = headwind) | | +0.00 |
Consumer prices subdued by heavy discounting and manufactured goods prices flat to down, despite sharply higher energy input costs. | Loan growth slowed in most districts and banks continued to tighten standards, though lower mortgage rates were expected to lift refinancing and the early-January rate cut helped sentiment. | Retailers cautiously optimistic for the first quarter and Richmond manufacturers expect a midyear rebound, but auto dealers, Cleveland, Atlanta and Chicago expect continued weakness. |
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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 | | Consumer DiscretionaryXLY | · | +1 | −1 | −1 | −1 | · | −1 | −1 | · | −1 | · | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | −1 | · | | IndustrialsXLI | · | −1 | −1 | −1 | −1 | −1 | −1 | −1 | −1 | −1 | −2 | −1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | +1 | +2 | +1 | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | +1 | · | · | −1 | −1 | · | · | +1 | −1 | −1 | +1 | | MaterialsXLB | · | · | −1 | −2 | −1 | · | −1 | −1 | −1 | −1 | −2 | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials −1 broad−based All except Boston Manufacturing activity weakened in all districts in December. Why it matters: Eleven negative reads across every weight bucket push Industrials sharply lower. | Industrials −2 Dallas Nearly all manufacturing contacts reported falling demand. Why it matters: Dallas carries 12% of Industrials; a -2 deepens the broad decline. | Materials −2 Cleveland Steel mills operating 10 to 30 percent below capacity; several chapter 11 filings. Why it matters: One of two -2 reads keeping Materials last. | Materials −2 Dallas Lumber selling prices dropped 'like a rock'; petrochemical margins fell sharply. Why it matters: Dallas is the largest Materials weight at 14%. | Information Technology −1 San Francisco Rising inventories among high-tech equipment providers; a major firm froze hiring. Why it matters: San Francisco is 47% of IT, so its first negative read pulls weighted IT below zero. | Energy +2 Kansas City Rig count rose 10 percent to an eight-year high. Why it matters: The only +2 this release, keeping Energy on top. |
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Twelve Fed districts District roundup Boston Flat Outlook ▼ Growth slowing; view 2001 with caution. |
| New York Growing +1.0 Outlook ▼ Well maintained at a high level. |
| Philadelphia Contracting −1.0 Outlook ▶ Signs of slower business activity. |
| Cleveland Flat Outlook ▼ Same slow rate as last report. |
| Richmond Flat Outlook ▲ Growth continued to slow. |
| Atlanta Growing +1.0 Outlook ▼ Expanded modestly amid deceleration. |
| Chicago Flat Outlook ▼ Slowed further in December. |
| St. Louis Flat Outlook ▲ Several signs of slowing. |
| Minneapolis Flat Outlook ▼ Economic growth is weakening. |
| Kansas City Flat Outlook ▶ Economy slowed in December. |
| Dallas Flat Outlook ▲ Continued to decelerate. |
| San Francisco Growing +1.0 Continued expansion, signs of slowing. |
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Where the signal is thin or split Divergences to watch | Industrials — eleven of twelve districts negative with Dallas at -2, the weakest Industrials reading in the series so far.
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| | Materials — two -2 readings (Cleveland steel, Dallas lumber and petrochemicals) keep Materials at the bottom for a fourth straight release.
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| | Energy — the only sector with no negative districts; Kansas City +2 offsets Dallas easing to +1.
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| | Information Technology — San Francisco turns -1, and with its 47% weight the weighted IT score falls below the unweighted average.
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| | Atlanta's district report is cut short in this PDF after the construction paragraph; its remaining sectors rely on the national summary.
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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 |