The Midwest Economy Index grew to 0.62 in July from a revised 0.56 in June, the Federal Reserve Bank of Chicago reported Friday.
The relative MEI improved to positive 0.29 in July from a revised negative 0.01 in June. The relative MEI indicates that growth in the region was higher than expected, based on national economic growth.
Manufacturing contributed 0.35 to the index in July, after a 0.31 addition in June, while adding 0.19 to the relative MEI, after a 0.05 addition in June.
Construction and mining added 0.02 in the month, after contributing 0.01 in June, while adding 0.07 to relative MEI after adding 0.07 to the index in June.
The service sector contributed 0.12 to MEI in June after contributing 0.05 the prior month, while adding 0.01 to relative MEI after subtracting 0.20 in June.
Consumer spending added 0.13 to MEI, after adding 0.20 in June, while contributing 0.02 to relative MEI, after a 0.07 addition in June.
By state, Wisconsin made the largest contribution in July, 0.17, with Iowa contributing 0.12, Michigan and Illinois each added 0.11, and Indiana contributed 0.10.
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.
