We like to keep tabs on what the Federal Reserve’s Beige Book has to say about the economy, but it can be hard to take a bottom line from a wordy document running 15 thousand words! To help with this problem, we created an index of positive and negative words the Beige Book has featured over time, creating an index of sentiment from the aggregated language of the document. The results tend to do a pretty good job tracking GDP growth, as shown in the chart below.
Beige Book sentiment rolled over hard over the past 9 months, but April’s release (published last Thursday) saw sentiment bounce considerably. That’s consistent with a number of economic indicators we’ve seen over the last few months, as well as the rocket ship uptick in GDP Nowcasts like the Atlanta Fed GDPNow index, which has bounced over two percentage points from March lows to the near-3% growth tracked for Q1 at present. While only one Beige Book release does not an economic upturn make, this data definitely supports the thesis that growth is making a comeback despite weak global activity. Want to track our Beige Book Index on a regular basis? Become a Bespoke Institutional member now! CLICK HERE to start a two-week free trial.