Twelfth District Business Sentiment

Twelfth District Business Sentiment presents two qualitative indexes that track the views of business leaders across the western United States—the SF Fed Business Sentiment Index and the SF Fed Inflation Gauge Index—as described in Abdelrahman, Oliveira, and Poduri (2025). The two series track the views and expectations of Twelfth District businesses and communities on economic growth and inflation and are based on information collected through the SF Fed’s Beige Book questionnaire responses since 2014.

The San Francisco Fed sends out a Beige Book questionnaire to business and community contacts across the District eight times per year to gather regional information. In addition to answering questions regarding their organizations, respondents share their views on regional and national topics, including economic activity and inflationary pressures.

In two questions, respondents indicate whether they see national output growth and inflation rates increasing, decreasing, or staying stable over the coming year using a standard five-tiered scale. These responses are used to formulate the SF Fed Business Sentiment Index and the SF Fed Inflation Gauge Index, respectively, by assigning standard weights to the five-tiered qualitative scale that are symmetrical around zero. For example, respondents can state that economic growth is expected to “decrease significantly,” “decrease,” “remain unchanged,” “increase,” or “increase significantly,” and these answers are assigned weights equal to -2, -1, 0, 1, and 2, respectively. The weighted shares of responses for each tier within each index are then added up and normalized by the sample’s average and standard deviation for ease of comparison with traditional economic indicators. Measures of national GDP growth, regional GDP growth, and monthly changes in year-over-year headline PCE inflation are similarly normalized for comparison.

The SF Fed Business Sentiment Index shown in Chart 1 and the SF Fed Inflation Gauge Index shown in Chart 2 will be updated eight times per year, following the release of each new Beige Book report according to the release schedule from the the Board of Governors of the Federal Reserve System.

Figure 1: SF Fed Business Sentiment Index and GDP growth

Figure 2: SF Fed Inflation Gauge Index and changes in inflation

References

Abdelrahman, Hamza, Luiz E. Oliveira, and Aditi Poduri. 2025. “Tracking Business Sentiment in the Western United States.” FRBSF Economic Letter 2025-18, August 11.

Download data

Twelfth District Business Sentiment Index and Inflation Gauge Index data (Excel document, 50 kb)