The Midwest Economy Index grew to 0.52 in November from a revised 0.36 in October, first reported as 0.51, the Federal Reserve Bank of Chicago said Tuesday.
The relative MEI soared to 0.72 in November from a revised 0.35 in October, initially reported as 0.33. The relative MEI, at its highest level in three years, indicates that growth in the region was moderately higher than expected, based on national economic growth.
Manufacturing contributed 0.35 to the index in November, after a 0.31 addition in October, while adding 0.57 to the relative MEI, after a 0.42 addition in October.
Construction and mining added 0.06 in the month, after a neutral contribution in October, while adding 0.05 to relative MEI after adding 0.03 to the index in October.
The service sector subtracted 0.02 from MEI in November after subtracting 0.02 the prior month, while deleting 0.04 from relative MEI after taking 0.14 in October.
Consumer spending added 0.12 to MEI, after adding 0.07 in October, while contributing 0.14 to relative MEI, after a 0.03 addition in October.
By state, Wisconsin made the largest contribution in November, 0.26, with Illinois contributing 0.22, Michigan contributing 0.09, Indiana adding 0.01, and Iowa subtracting 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.
