EconomyxAI · Beige Book Sector Monitor September 2002Released September 11, 2002 |
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Conditions index +0.06 avg of 11 sectors, −2 to +2 |
| Outlook index +0.12 sectors with an outlook |
| Districts growing 2/12 per National Summary |
| Positive momentum 3/11 sectors improving |
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This release in brief The read | ■ | Released September 11, 2002, with information collected before September 3. | | ■ | Growth slowed in recent weeks; only Atlanta and San Francisco reported modest improvement, while Boston and Dallas saw little change and most districts described slow, uneven growth. | | ■ | Retail sales were mixed, with strong home furnishings and appliances but weak apparel; auto sales rose on aggressive incentives. | | ■ | Housing and mortgage refinancing stayed strong nearly everywhere, while commercial real estate and business lending remained weak. | | ■ | Hiring was flat and wages showed no pressure; rising health insurance costs were a widespread concern, and manufacturers were less optimistic than earlier in the year. |
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Sector prospects Where the 3–12 month view points Strongest prospects Health Care
XLV
▶ Steady | +0.23 |
| Communication Services
XLC
▲ Turning up | +0.07 |
| Financials
XLF
▶ Steady | +0.02 |
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| Weakest prospects Information Technology
XLK
▼ Turning down | −0.19 |
| Industrials
XLI
▼ Weakening | −0.18 |
| Consumer Discretionary
XLY
▶ Steady | −0.17 |
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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 | Health Care
XLV | | +0.23 | Leaning Favorable | +0.29 | n/a | ▶ +0.15 | | 2 | Communication Services
XLC | | +0.07 | Neutral | +0.05 | n/a | ▲ +0.44 | | 3 | Financials
XLF | | +0.02 | Neutral | +0.10 | −0.19 | ▶ +0.00 | | 4 | Utilities
XLU | | −0.00 | Neutral | +0.00 | n/a | ▶ +0.00 | | 5 | Consumer Staples
XLP | | −0.00 | Neutral | +0.00 | n/a | ▶ +0.00 | | 6 | Real Estate
XLRE | | −0.02 | Neutral | +0.24 | −0.10 | ▲ +0.31 | | 7 | Materials
XLB | | −0.03 | Neutral | +0.15 | +0.50 | ▼ −0.49 | | 8 | Energy
XLE | | −0.04 | Neutral | +0.10 | +0.31 | ▶ −0.50 | | 9 | Consumer Discretionary
XLY | | −0.17 | Leaning Unfavorable | −0.06 | −0.14 | ▶ −0.18 | | 10 | Industrials
XLI | | −0.18 | Leaning Unfavorable | −0.35 | +0.15 | ▼ −0.66 | | 11 | Information Technology
XLK | | −0.19 | Leaning Unfavorable | +0.10 | +0.29 | ▼ −0.43 |
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 |
Growth slowed; only two districts reported modest improvement and two saw little change, with the rest slow and uneven. | Little or no employment gain in July and August; labor plentiful, wages flat, though temp demand firmed in three districts. | | Inflation Pressure (higher = headwind) | | +0.00 |
Prices of inputs and final goods flat or slightly up; steel and health insurance the main pressures. | Strong mortgage and refinancing demand everywhere; business lending weak in all districts and C&I standards tightened; credit quality good. | Positive attitudes persist but manufacturers less optimistic than earlier in 2002; Dallas flags Iraq and terrorism risk; Philadelphia sees confidence more fragile. |
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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 | · | · | · | · | · | · | · | · | · | · | +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 | | Consumer StaplesXLP | · | · | · | · | · | · | · | · | · | · | · | · | | EnergyXLE | · | · | · | · | · | · | · | · | · | +1 | · | · | | UtilitiesXLU | · | · | · | · | · | · | · | · | · | · | · | · | | Real EstateXLRE | −1 | +1 | · | · | +1 | +1 | +1 | · | · | · | −1 | · | | MaterialsXLB | · | · | +1 | · | · | +1 | +1 | +1 | · | · | −1 | · |
| Contraction | −2 | −1 | 0 | +1 | +2 | Expansion |
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Top highlights What moved the scores Industrials −1 Chicago, Dallas, San Francisco, Boston, Minneapolis Heavy truck orders at 'deep recessionary' levels; air travel demand very low; aircraft demand reduced. Why it matters: Negatives in several large districts turn Industrials negative on a weighted basis. | Real Estate +1 Chicago, Richmond, Atlanta, New York Housing momentum 'like a locomotive' with low rates 'driving the train'; home sales 'skyrocketing.' Why it matters: Broad housing strength keeps Real Estate positive despite commercial weakness. | Real Estate −1 Boston, Dallas Boston office rents about half of 2000 levels; Dallas nonresidential markets 'terrible.' Why it matters: Two commercial negatives offset part of the housing boost. | Materials +1 Chicago, St. Louis, Atlanta, Philadelphia Steel orders 'still look really good'; glass producers at full capacity; strong building materials demand. Why it matters: Four positive readings keep Materials among the leaders even with Dallas negative. | Financials −1 Dallas, Philadelphia Financial market volatility led to a sharp reduction in market-related activities. Why it matters: Capital-markets weakness partly offsets mortgage-led lending gains. | Financials +1 Richmond, Atlanta, Chicago Refinancings accounted for 70 to 80 percent of some bankers' lending in August. Why it matters: Refinancing boom keeps Financials modestly positive. |
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Twelve Fed districts District roundup Boston Flat Outlook ▼ Economy moving sideways, on net. |
| New York Flat Outlook ▲ Activity remained sluggish except housing. |
| Philadelphia Flat Outlook ▲ Upward trend appeared to ease in August. |
| Cleveland Flat Outlook ▲ Mixed signals during July and August. |
| Richmond Flat Only scattered signs of growth. |
| Atlanta Growing +1.0 Outlook ▶ Modest improvement in economic activity. |
| Chicago Flat Slow and uneven expansion. |
| St. Louis Flat Outlook ▲ Recovery continues at a slow pace. |
| Minneapolis Flat Economy appears to have grown very little. |
| Kansas City Flat Outlook ▲ Growth showed some signs of moderating. |
| Dallas Flat Outlook ▼ Economic growth appears to have stalled. |
| San Francisco Growing +1.0 Modest economic growth. |
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Where the signal is thin or split Divergences to watch | Real Estate — Housing strength in four districts is partly cancelled by Boston and Dallas commercial weakness, so the weighted score stays modest.
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| | Industrials — Atlanta's defense-driven gains and New York's rebound are outweighed by negatives in Chicago, Dallas, San Francisco, Boston and Minneapolis.
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| | Communication Services & Utilities — Thin coverage; only Richmond internet services scored positive.
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| | District validation: most districts at 0 overall, matching the 'slow and uneven' national characterization; Atlanta and San Francisco at +1 per the 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 |