The Midwest Economy Index improved to 0.60 in March from 0.28 in February, the Federal Reserve Bank of Chicago said Friday.

The relative MEI grew to 0.40 from 0.23 in February.

Manufacturing added 0.22 to the index, after contributing 0.10 to the index in February, while adding 0.14 to the relative MEI, after a 0.11 contribution in February.

Construction and mining added 0.13 in the month, after a 0.06 contribution in February, while added 0.16 to relative MEI index after a 0.07 addition in February.

The service sector MEI added 0.11 after a 0.07 contribution the prior month, while adding 0.02 to relative MEI after a neutral level in February.

Consumer spending added 0.13 to MEI, after a 0.05 addition in February, while contributing 0.08 to relative MEI after a 0.05 addition the prior month.

By state, Wisconsin made the largest contribution in March, adding 0.25 to the index, Michigan contributed 0.12, Illinois added 0.10, Iowa contributed 0.09, and Indiana contributed 0.06 to 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.

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Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.