Midwest Growth Slightly Better: Chicago Fed

The Midwest Economy Index rose to negative 0.04 in August from a revised negative 0.16 in July, first reported as negative 0.14, the Federal Reserve Bank of Chicago said Friday.

The relative MEI grew to 0.11 from 0.01 in July. The relative MEI indicates that growth in the region was slightly higher than what would be expected based on national economic growth.

Manufacturing subtracted 0.01 from the index, after taking 0.05 from the index in July, while adding 0.12 to the relative MEI, the same as in July.

Construction and mining subtracted 0.07 in the month, after a 0.09 subtraction in July, while taking 0.03 from the relative MEI index the same as in July.

The service sector added 0.04 to MEI after a 0.05 subtraction the prior month, while adding 0.04 to relative MEI after a 0.11 subtraction in July.

Consumer spending added 0.01 to MEI, after adding 0.03 in July, while taking 0.01 from relative MEI, after a 0.02 addition in July.

By state, Michigan made the largest contribution in August, adding 0.05 to the index, and Illinois contributed 0.02. Wisconsin subtracted 0.04 from the index, Indiana deleted 0.01 and Iowa subtracted 0.06.

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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