Midwest Growth Gains in June: Chicago Fed

The Midwest Economy Index grew to 0.55 in June from a revised 0.45 in May, the Federal Reserve Bank of Chicago reported Thursday.

The relative MEI improved to negative 0.02 in June from a revised negative 0.52 in May. The relative MEI indicates that growth in the region was "roughly consistent" with national economic growth.

Manufacturing contributed 0.29 to the index in June, after a 0.32 addition in May, while adding 0.06 to the relative MEI, after a 0.12 subtraction in May.

Construction and mining added 0.02 in the month, after subtracting 0.01 in May, while adding 0.07 to relative MEI after adding 0.02 to the index in May.

The service sector contributed 0.04 to MEI in June after subtracting 0.08 the prior month, while subtracting 0.21 from relative MEI after taking 0.53 in May.

Consumer spending added 0.20 to MEI, after adding 0.22 in May, while contributing 0.06 to relative MEI, after a 0.11 addition in May.

By state, Iowa made the largest contribution in June, 0.15, with Illinois adding 0.13, Indiana and Wisconsin each contributing 0.11, and Michigan contributed 0.05.

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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