Economic Quarterly

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.