NEW YORK – The Midwest Economy Index improved to 0.82 in March from 0.61 in February, its highest level since March 1995, according to the Federal Reserve Bank of Chicago, meaning growth was above its historical trend.
The relative MEI posted a 0.16 reading in March, off from 0.27 reading in February.
Manufacturing contributed 0.65 to the index in March, after a 0.49 contribution in February, while contributing 0.42 to the relative MEI, unchanged from February.
Construction and mining subtracted 0.09 from MEI in March, after subtracting 0.11 in February, and for relative MEI the sector subtracted 0.05 in March, after subtracting 0.07 in February.
The service sector contributed 0.06 to MEI in March after contributing 0.05 in February, while subtracting 0.28 from relative MEI in March after subtracting 0.17 in February.
Consumer spending added 0.20 to MEI in March, up from 0.18 in February, while contributing 0.06 to relative MEI in March after a 0.09 contribution in February.
In terms of contribution to Midwest economic growth by state, Iowa led the way, followed by Wisconsin, Indiana, Michigan and Illinois.
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.
