EconomyxAI · Beige Book Sector Monitor June 2023Released July 12, 2023 |
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Conditions index −0.16 avg of 11 sectors, −2 to +2 |
| Outlook index −0.27 sectors with an outlook |
| Districts growing 5/12 per National Summary |
| Positive momentum 7/11 sectors improving |
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This release in brief The read | ■ | Released July 12, 2023, with information collected on or before June 30, 2023. | | ■ | Overall activity increased slightly; five districts grew slightly or modestly, five unchanged, two declined. | | ■ | Consumer services grew while some retailers saw shifts away from discretionary goods; tourism robust; manufacturing split. | | ■ | Lending continued to soften; housing demand steady but inventory-constrained; energy activity decreased. |
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Sector prospects Where the 3–12 month view points Strongest prospects Materials
XLB
▶ Steady | +0.12 |
| Consumer Staples
XLP
▶ Steady | +0.06 |
| Information Technology
XLK
▲ Turning up | +0.06 |
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| Weakest prospects Financials
XLF
▲ Improving | −0.47 |
| | Consumer Discretionary
XLY
▼ Turning down | −0.42 |
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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 | Materials
XLB | | +0.12 | Neutral | +0.15 | +0.00 | ▶ +0.34 | | 2 | Consumer Staples
XLP | | +0.06 | Neutral | +0.16 | +0.00 | ▶ +0.10 | | 3 | Information Technology
XLK | | +0.06 | Neutral | +0.00 | +0.00 | ▲ +0.33 | | 4 | Utilities
XLU | | +0.04 | Neutral | +0.13 | +0.00 | ▶ +0.11 | | 5 | Health Care
XLV | | +0.02 | Neutral | +0.05 | +0.00 | ▶ +0.07 | | 6 | Communication Services
XLC | | −0.02 | Neutral | −0.03 | +0.00 | ▶ −0.03 | | 7 | Real Estate
XLRE | | −0.24 | Leaning Unfavorable | −0.07 | −0.50 | ▶ +0.11 | | 8 | Industrials
XLI | | −0.29 | Leaning Unfavorable | −0.45 | −0.50 | ▶ −0.21 | | 9 | Consumer Discretionary
XLY | | −0.42 | Leaning Unfavorable | −0.32 | −0.50 | ▼ −0.57 | | 10 | Energy
XLE | | −0.47 | Leaning Unfavorable | −0.69 | −0.50 | ▶ −0.41 | | 11 | Financials
XLF | | −0.47 | Leaning Unfavorable | −0.65 | −1.00 | ▲ +0.53 |
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; five districts grew, five flat, two declined. | Employment increased modestly; hiring more selective; labor availability improved. | | Inflation Pressure (higher = headwind) | | +0.50 |
Prices increased at a modest pace with some slowing; manufacturing input costs eased notably. | Banking conditions subdued; lending continued to soften. | Expectations generally continued to call for slow growth. |
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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 | · | · | · | · | · | · | · | · | · | · | · | · | | 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 | −1 | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | −1 | · | · | | IndustrialsXLI | +1 | +1 | · | · | −1 | · | −1 | · | · | −1 | −1 | −1 | | Consumer StaplesXLP | +1 | · | · | · | · | · | +1 | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | +1 | · | −1 | −2 | −1 | · | | UtilitiesXLU | · | · | · | · | · | +1 | · | · | · | · | · | · | | Real EstateXLRE | −1 | +1 | · | −1 | · | +1 | −1 | · | −1 | · | +1 | −1 | | MaterialsXLB | · | · | · | −1 | · | · | · | · | · | · | · | +1 |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy −2 Kansas City Energy activity decreased significantly. Why it matters: Strongest negative. | Energy −1 Dallas, Minneapolis Drilling activity declined; natural gas layoffs. Why it matters: Dallas carries the largest Energy weight. | Financials −1 broad−based Broad-based Lending activity continued to soften. Why it matters: Financials negative. | Consumer Discretionary −1 Chicago, St. Louis, Dallas, San Francisco, Philadelphia Spending shifted away from discretionary goods. Why it matters: Drags Discretionary. | Consumer Discretionary +1 New York, Boston, Richmond, Minneapolis Spending shifted toward experiences; tourism strong. Why it matters: Partial offset. | Real Estate +1 New York, Atlanta, Dallas Housing demand remained strong. Why it matters: Real Estate improving. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Expanded at a slight pace. |
| New York Flat Outlook ▶ Stabilized after weakness. |
| Philadelphia Contracting −0.5 Outlook ▼ Continued to decline slightly. |
| Cleveland Flat Outlook ▲ Generally stable. |
| Richmond Growing +0.5 Outlook ▶ Grew slightly. |
| Atlanta Growing +0.5 Outlook ▶ Grew slowly. |
| Chicago Flat Outlook ▼ Little changed. |
| St. Louis Flat Outlook ▼ Unchanged. |
| Minneapolis Growing +0.5 Outlook ▲ Grew slightly. |
| Kansas City Flat Outlook ▼ Changed little. |
| Dallas Growing +0.5 Outlook ▼ Modest expansion continued. |
| San Francisco Contracting −0.5 Outlook ▼ Softened modestly. |
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Where the signal is thin or split Divergences to watch | Energy — Kansas City -2 and Dallas -1 push Energy negative as gas prices stay weak.
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| | Financials — broad -1 lending reads keep Financials weakest despite easing bank stress.
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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 |