The Midwest Economy Index improved to positive 0.06 in December from a revised negative 0.02 in November, first reported as negative 0.01, the Federal Reserve Bank of Chicago said Tuesday.
The relative MEI declined to 0.12 from a revised 0.16 in November, first reported as 0.20. The relative MEI indicates that growth in the region was slightly higher than what would be expected based on national economic growth.
Manufacturing added 0.05 to the index, after subtracting 0.01 from the index in November, while adding 0.17 to the relative MEI, after a 0.22 contribution in November.
Construction and mining subtracted 0.02 in the month, after a 0.03 subtraction in November, while the relative MEI index was neutral after a 0.02 subtraction in November.
The service sector MEI was neutral after a 0.01 subtraction the prior month, while subtracting 0.07 from relative MEI after taking 0.02 from the index in November.
Consumer spending added 0.03 to MEI, after adding 0.04 in November, while contributing 0.02 to relative MEI after a 0.01 addition the prior month.
By state, Michigan made the largest contribution in November, adding 0.19 to the index and Indiana contributed 0.04. Iowa subtracted 0.07 from the index, while Illinois subtracted 0.08 and Wisconsin subtracted 0.04 from the index.
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.
