EconomyxAI · Beige Book Sector Monitor July 2026Released July 15, 2026 · Data through July 6 |
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Conditions index +0.33 avg of 11 sectors, −2 to +2 |
| Outlook index +0.37 sectors with an outlook |
| Districts growing 11/12 per National Summary |
| Positive momentum 8/11 sectors improving |
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This release in brief The read | ■ | Activity rose slightly to moderately in 11 of 12 districts; San Francisco was flat. | | ■ | Manufacturing and freight lead again on data center, machinery and defense orders; New York and Cleveland are strongest, and Dallas banking and energy picked up. | | ■ | Inflation is still moderate but no faster anywhere; input costs keep outrunning selling prices for consumer-facing firms as fuel costs bite. | | ■ | Consumers remain split: tourism got a World Cup lift, but discretionary goods softened in Cleveland, St. Louis and San Francisco and trading down is widespread. | | ■ | Outlooks improved: Boston, New York, Cleveland, Chicago and Kansas City expect growth, and hiring broadened to five districts from one. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Industrials
XLI
▶ Steady | +0.45 |
| Financials
XLF
▲ Improving | +0.36 |
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| Weakest prospects Consumer Staples
XLP
▶ Steady | −0.08 |
| Materials
XLB
▼ Weakening | −0.05 |
| Utilities
XLU
▶ Steady | −0.05 |
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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 | | +0.58 | Favorable | +0.55 | +0.90 | ▶ −0.09 | | 2 | Industrials
XLI | | +0.45 | Leaning Favorable | +1.04 | +0.52 | ▶ +0.23 | | 3 | Financials
XLF | | +0.36 | Leaning Favorable | +0.76 | +0.83 | ▲ +0.38 | | 4 | Information Technology
XLK | | +0.32 | Leaning Favorable | +0.32 | n/a | ▶ +0.43 | | 5 | Communication Services
XLC | | +0.27 | Leaning Favorable | +0.22 | n/a | ▲ +0.42 | | 6 | Health Care
XLV | | +0.20 | Leaning Favorable | +0.31 | +1.00 | ▶ +0.27 | | 7 | Consumer Discretionary
XLY | | +0.15 | Leaning Favorable | −0.02 | +0.46 | ▶ +0.42 | | 8 | Real Estate
XLRE | | +0.10 | Neutral | +0.50 | −0.15 | ▲ +0.65 | | 9 | Utilities
XLU | | −0.05 | Neutral | +0.13 | n/a | ▶ −0.03 | | 10 | Materials
XLB | | −0.05 | Neutral | −0.19 | n/a | ▼ −0.37 | | 11 | Consumer Staples
XLP | | −0.08 | Neutral | +0.02 | −1.00 | ▶ +0.03 |
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 |
Eleven districts grew slightly to moderately and one was flat, a touch better than last time (ten up, one flat, one down). | Five districts reported modest to solid job gains versus one last period; the other seven were roughly flat, and declines were small. | | Inflation Pressure (higher = headwind) | | +1.25 |
Prices rose moderately overall (nine moderate, two robust, one slight), with growth the same or slower in every district, so pressure eased slightly from 1.5. | Financial conditions were stable on net and loan volumes rose modestly, but consumer credit quality ticked down, Chicago saw slight tightening and higher rates, and New York, Dallas and St. Louis tightened standards; higher mortgage rates were cited in several districts. | Contacts generally expected continued expansion; New York grew more optimistic, Boston's outlook improved, Cleveland expects faster growth, Kansas City slight growth; St. Louis unchanged and San Francisco weak but less so. |
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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 | +1 | · | · | · | +1 | · | | Health CareXLV | · | +1 | · | · | · | +1 | · | · | · | · | +1 | · | | FinancialsXLF | +1 | +1 | +1 | +1 | +1 | +1 | · | · | +1 | · | +2 | · | | Consumer DiscretionaryXLY | +1 | +1 | +1 | −1 | +1 | · | +1 | −1 | · | · | · | −1 | | Communication ServicesXLC | · | +1 | · | · | · | · | · | · | · | · | +1 | · | | IndustrialsXLI | · | +2 | +1 | +2 | +1 | +1 | +1 | · | +1 | +1 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | +1 | · | · | −1 | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | · | +1 | +1 | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | −1 | +2 | · | +2 | +1 | · | +1 | · | +1 | +1 | · | · | | MaterialsXLB | · | · | · | +1 | · | · | +1 | · | · | · | −1 | −1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials +2 New York New orders and shipments expanded at a solid clip; defense and aerospace demand strong; construction grew briskly. Why it matters: Broadest strong industrial read in the report, and manufacturers expect further strength. | Industrials +2 Cleveland Manufacturing demand rose moderately on data centers and reshoring; freight demand grew robustly. Why it matters: Strong current demand plus a +2 outlook in a heavily industrial district. | Financials +2 Dallas Loan volume and demand grew notably; bankers expect strong growth in loan demand. Why it matters: Only +2 in Financials, paired with a +2 outlook, lifting the sector's outlook score. | Consumer Discretionary −1 San Francisco Retail sales ticked down; demand for specialty and big-ticket discretionary items weakened. Why it matters: San Francisco carries 26% of discretionary weight, pulling the weighted score well below the unweighted average. | Industrials +1 broad−based Chicago, Kansas City, Atlanta, Minneapolis, Richmond Manufacturing rose modestly to moderately; Chicago machinery sales increased strongly on defense and data centers. Why it matters: Breadth across high-weight industrial districts keeps Industrials at the top. | Real Estate +2 New York Manhattan office demand robust among AI-related firms; rents strengthening; construction grew briskly. Why it matters: New York carries 14% of Real Estate weight; a +2 here offsets weakness in Boston. |
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Twelve Fed districts District roundup Boston Growing +1.0 Outlook ▲ Expanded slightly; World Cup lifted spending; outlook improved on balance. |
| New York Growing +1.0 Outlook ▲ Increased modestly as services picked up; businesses became more optimistic. |
| Philadelphia Growing +1.0 Outlook ▶ Rose slightly after a slight decline; manufacturers more optimistic than nonmanufacturers. |
| Cleveland Growing +1.0 Outlook ▲ Increased modestly with faster growth anticipated; retail hit by fuel prices. |
| Richmond Growing +1.5 Expanded moderately; consumer spending grew despite trade-downs. |
| Atlanta Growing +1.0 Grew modestly; employment flat; real estate little changed. |
| Chicago Growing +1.0 Outlook ▲ Increased modestly; manufacturing demand rose moderately; slight growth expected. |
| St. Louis Growing +1.0 Outlook ▶ Slightly increased; prices rose at a robust pace; outlook unchanged. |
| Minneapolis Growing +1.0 Expanded slightly; services, construction, CRE and manufacturing grew. |
| Kansas City Growing +1.0 Outlook ▲ Expanded slightly on manufacturing; inflation compressed margins. |
| Dallas Growing +1.5 Outlook ▲ Rose moderately; banking, energy and services picked up. |
| San Francisco Flat Outlook ▼ Stable but somewhat muted; retail and services edged down. |
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Where the signal is thin or split Divergences to watch | Financials — broad +1 across eight districts plus Dallas at +2 and a strong Dallas outlook, but New York (28% weight) loan demand was flat to lower; credit tightening and rising consumer delinquencies temper the read.
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| | Consumer Discretionary — unweighted read is mildly positive on World Cup tourism, but San Francisco (26% weight) is negative, and margins remain squeezed; outlook improved as fuel prices fall.
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| | Information Technology — up in five smaller districts on AI and data center demand, but San Francisco (47% weight) is flat, so the weighted score lags the breadth. No IT-specific outlooks.
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| | Real Estate — New York and Cleveland strong, Boston weak, San Francisco and Dallas flat; Atlanta builders lowered expectations as mortgage rates rose.
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| | Materials — metals demand up on data centers and reshoring, but Dallas petrochemicals and San Francisco building materials fell, leaving the weighted read near zero.
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| | COMMUNICATION SERVICES and UTILITIES: thin coverage; scored 0 except explicit mentions (New York and Dallas information revenues; Atlanta power demand).
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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 |