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Midwest Growth Stays Negative in December: Chicago Fed

The Midwest Economy Index narrowed to negative 0.18 in December from a downwardly revised 0.30 in November, the Federal Reserve Bank of Chicago reported Thursday.

The relative MEI posted a negative 0.01 reading in December, up from its revised positive 0.55 reading in November.

November's MEI was originally reported as negative 0.21, while the relative MEI was first reported as positive 0.63.

Manufacturing subtracted 0.10 from the index in December, after a 0.16 subtraction in November, while subtracting 0.02 from the relative MEI, after a 0.22 addition in November.

Construction and mining took 0.11 from MEI in December, after subtracting 0.08 in November, while subtracting 0.04 from relative MEI in December after contributing 0.04 in November.

The service sector subtracted 0.09 from MEI in December after subtracting 0.07 in November, while taking 0.21 from relative MEI in December after contributing 0.18 in November.

Consumer spending added 0.11 to MEI in December, after contributing 0.01 in November, while subtracting 0.09 from relative MEI, after adding 0.18 in November.

All five states made negative contributions in DEcember, with Indiana at negative 0.01, Iowa at negative 0.01, Illinois at negative 0.04, Wisconsin at negative 0.02, and Michigan at negative 0.08.

The index is a weighted average of 128 state and regional indicators encompassing the five states in the Seventh Federal Reserve District (Illinois, Indiana, Iowa, Michigan, and Wisconsin). The index measures growth in nonfarm business activity.

A zero value for the MEI indicates that the Midwest economy is expanding at its historical trend rate of growth; negative values are associated with below-trend growth while positive values indicate above-trend growth. A zero value for the relative MEI indicates that the Midwest economy is growing at a rate historically consistent with the growth of the national economy; positive values indicate above-average relative growth; and negative values indicate below-average relative growth.

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