The Midwest Economy Index slipped to negative 0.02 in June from an upwardly revised positive 0.20 in May, first reported as positive 0.17, the Federal Reserve Bank of Chicago said Friday.
This was the first time since November 2012 the MEI was negative.
The relative MEI dropped to 0.09 in June from a downwardly revised 0.41 in May, first reported as 0.55. The relative MEI indicates that growth in the region was close to what would be expected based on national economic growth.
Manufacturing contributed 0.02 to the index, after a 0.08 addition in May, while adding 0.10 to the relative MEI, after a 0.15 addition in May.
Construction and mining removed 0.09 in the month, after a 0.06 subtraction in May, while making a neutral contribution in June to relative MEI after adding 0.05 to the index in May.
The service sector subtracted 0.01 from MEI in after adding 0.06 the prior month, while contributing 0.03 to relative MEI after adding 0.22 in May.
Consumer spending added 0.06 to MEI, after adding 0.11 in May, while subtracting 0.04 from relative MEI, after a 0.01 subtraction in May.
By state, Michigan made the largest contribution in June, 0.19, with Indiana contributing 0.05. Iowa subtracted 0.04, while Illinois deleted 0.07, and Wisconsin subtracted 0.14.
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.
