NEW YORK – The Midwest Economy Index improved to positive 0.09 in December from a revised negative 0.13 in November, according to the Federal Reserve Bank of Chicago, the first positive reading in five months, meaning growth was above its historical trend.
The relative MEI posted a positive 0.31 reading in December, up from a negative 0.06 reading in November.
Manufacturing contributed 0.22 to the index in December, after a 0.21 contribution in November, while contributing 0.38 to the relative MEI, up from 0.36 in November.
Construction and mining contributed negative 0.19 in December, after negative 0.19 in November to MEI, and for relative MEI the sector subtracted 0.12 after subtracting 0.09 in November.
The service sector subtracted 0.03 from MEI in December after contributing negative 0.11 in November, while contributing negative 0.09 to relative MEI in December after negative 0.33 in November.
Consumer spending added 0.09 from MEI in December, up from negative 0.03 in November, while contributing 0.14 to relative MEI in December after being neutral in November.
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.