August Midwest index signals steady growth: Chicago Fed

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The August Midwest Economy Index slipped to 0.42 from 0.43 in July, the Federal Reserve Bank of Chicago said Friday.

The relative MEI gained to 0.28 from 0.11 in July.

Manufacturing added 0.39 to the index, after contributing 0.38 to the index in July, while adding 0.35 to the relative MEI, after a 0.28 contribution in July.

Construction and mining added 0.03 in the month, after a 0.02 contribution in July, while contributing 0.07 to relative MEI index after a 0.04 addition in July.

The service sector MEI subtracted 0.06 after a 0.06 subtraction in the prior month, while subtracting 0.18 from relative MEI after a 0.26 subtraction in July.

Consumer spending added 0.06 to MEI, after a 0.09 contribution in July, while contributing 0.05 in August, after a 0.04 contribution the prior month.

By state, Illinois added 0.14 in August, Michigan contributed 0.12, Wisconsin contributed 0.11, Iowa added 0.08, and Indiana subtracted 0.03.

The index is a weighted average of 129 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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Economic indicators Federal Reserve Bank of Chicago