EconomyxAI · Beige Book Sector Monitor October 2005Released October 19, 2005 |
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Conditions index +0.40 avg of 11 sectors, −2 to +2 |
| Outlook index +0.14 sectors with an outlook |
| Districts growing 10/12 per National Summary |
| Positive momentum 1/11 sectors improving |
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This release in brief The read | ■ | Released October 19, 2005, with information collected before early October 2005 (date not printed in the PDF). | | ■ | Activity kept expanding in September at a mostly moderate pace; Richmond quickened and New York slowed, while Atlanta was mixed and Dallas disrupted by Hurricanes Katrina and Rita. | | ■ | Retail sales rose in most districts but missed plans in New York and St. Louis; auto sales fell everywhere as discount programs ended, and tourism was mixed. | | ■ | Manufacturing advanced in all districts except St. Louis and Atlanta, commercial real estate firmed, and housing stayed high but showed more signs of easing. | | ■ | Labor markets tightened; every district reported higher costs for energy, petroleum-based products, building materials and shipping, with more pass-through to prices. |
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Sector prospects Where the 3–12 month view points Strongest prospects | Information Technology
XLK
▶ Steady | +0.41 |
| Industrials
XLI
▶ Steady | +0.37 |
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| Weakest prospects Consumer Discretionary
XLY
▼ Weakening | −0.22 |
| Consumer Staples
XLP
▶ Steady | +0.01 |
| Utilities
XLU
▶ Steady | +0.02 |
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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 | | +0.60 | Favorable | +1.20 | +0.50 | ▶ −0.09 | | 2 | Information Technology
XLK | | +0.41 | Leaning Favorable | +0.64 | +0.50 | ▶ −0.01 | | 3 | Industrials
XLI | | +0.37 | Leaning Favorable | +0.87 | +0.50 | ▶ −0.08 | | 4 | Real Estate
XLRE | | +0.26 | Leaning Favorable | +0.80 | +0.00 | ▶ −0.05 | | 5 | Health Care
XLV | | +0.13 | Neutral | +0.25 | +0.00 | ▶ +0.03 | | 6 | Financials
XLF | | +0.11 | Neutral | +0.57 | +0.00 | ▼ −0.10 | | 7 | Materials
XLB | | +0.11 | Neutral | +0.17 | +0.00 | ▶ −0.24 | | 8 | Communication Services
XLC | | +0.03 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 9 | Utilities
XLU | | +0.02 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 10 | Consumer Staples
XLP | | +0.01 | Neutral | +0.00 | +0.00 | ▶ +0.00 | | 11 | Consumer Discretionary
XLY | | −0.22 | Leaning Unfavorable | −0.08 | +0.00 | ▼ −1.08 |
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 |
Expansion continued at a moderate or gradual pace; hurricane damage weighed on Atlanta and disrupted Dallas. | Employment rising with some tightening; wage increases moderate but brisk in services and skilled occupations. | | Inflation Pressure (higher = headwind) | | −1.25 |
All districts reported higher costs for energy, petroleum products, building materials and shipping; several report pass-through. | Lending rose in most districts; C&I advanced in five; competition for loans very intense. | Consumer confidence ebbed with gasoline prices; firms expect high energy and construction costs to persist. |
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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 | | Consumer DiscretionaryXLY | −1 | · | −1 | · | · | −1 | · | · | · | · | +1 | · | | Communication ServicesXLC | · | · | · | · | · | · | · | · | · | · | · | · | | IndustrialsXLI | +1 | +1 | · | +1 | +1 | · | +1 | · | +1 | +2 | +1 | +1 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | −1 | · | · | +1 | +1 | +2 | +1 | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | · | · | · | · | +1 | +1 | +1 | +1 | +1 | · | +2 | +1 | | MaterialsXLB | · | · | · | +1 | · | · | +1 | · | · | · | · | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Energy +2 Dallas Firms can't fill orders; service prices rising. Why it matters: Largest Energy weight. | Real Estate +2 Dallas Evacuee influx caused a surge in real estate. Why it matters: Real Estate strength. | Industrials +2 Kansas City Manufacturing expanded strongly. Why it matters: Industrials strength. | Industrials +1 broad−based Broad-based Manufacturing expanded in most districts. Why it matters: Broad Industrials support. | Consumer Discretionary −1 Boston, Philadelphia, Atlanta Auto sales fell sharply after discounts ended. Why it matters: Discretionary drag. | Energy −1 Atlanta 90% of Gulf oil production offline. Why it matters: Energy drag. |
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Twelve Fed districts District roundup Boston Growing +0.5 Outlook ▲ Growth continued; retail slowed late. |
| New York Growing +0.5 Outlook ▲ Growth moderated. |
| Philadelphia Flat Outlook ▶ Advanced slowly. |
| Cleveland Growing +0.5 Outlook ▲ Gradual improvement. |
| Richmond Growing +1.0 Outlook ▲ Expanded at a quicker pace. |
| Atlanta Contracting −0.5 Outlook ▼ Mixed; hurricanes severely disrupted activity. |
| Chicago Growing +0.5 Outlook ▲ Expanded at a moderate pace. |
| St. Louis Growing +0.5 Outlook ▲ Expanded moderately. |
| Minneapolis Growing +0.5 Outlook ▲ Grew moderately. |
| Kansas City Growing +0.5 Outlook ▲ Expanded moderately. |
| Dallas Growing +0.5 Outlook ▲ Continued to expand despite hurricanes. |
| San Francisco Growing +1.0 Outlook ▲ Expanded further. |
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Where the signal is thin or split Divergences to watch | Consumer Discretionary — Several -1s from auto sales payback push both weighted and simple averages toward zero.
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| | Energy — Dallas's +2 outweighs Atlanta's -1 in the weighted Energy score.
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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 |