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Sentiment Analysis of the Fifth District Manufacturing and Service Surveys

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  • Santiago Pinto

Abstract

This article uses basic text analytic techniques to examine the sentiment embodied in two surveys conducted by the Richmond Fed: the Manufacturing and Service Sector Surveys. Specifically, the article develops several sentiment indicators based on the comments provided by survey participants, contrasts the sentiment measures against responses to other survey questions, and analyzes the monthly evolution of the sentiment indicators during the period 2002-18. Two main conclusions emerge from the analysis. First, the indicators reflect reasonably well changes in economic sentiment along time. Second, negative sentiment has been increasing since approximately August 2017. However, during this same period, the composite DI reported by the Richmond Fed (an indicator that intends to capture the strength of economic conditions in the Fifth District) has been increasing as well.

Suggested Citation

  • Santiago Pinto, 2019. "Sentiment Analysis of the Fifth District Manufacturing and Service Surveys," Economic Quarterly, Federal Reserve Bank of Richmond, issue 3Q, pages 133-170.
    • Handle: RePEc:fip:fedreq:00068
    as

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    File URL: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/economic_quarterly/2019/q3/pinto.pdf
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    References listed on IDEAS

    as
    1. David A. Price & Aileen Watson, 2014. "The Richmond Fed Manufacturing and Service Sector Surveys: A User's Guide," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, issue Mar.
    2. Souleles, Nicholas S, 2004. "Expectations, Heterogeneous Forecast Errors, and Consumption: Micro Evidence from the Michigan Consumer Sentiment Surveys," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 36(1), pages 39-72, February.
    3. Tim Loughran & Bill Mcdonald, 2011. "When Is a Liability Not a Liability? Textual Analysis, Dictionaries, and 10‐Ks," Journal of Finance, American Finance Association, vol. 66(1), pages 35-65, February.
    Full references (including those not matched with items on IDEAS)

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