NEW YORK – The Midwest Economy Index improved to 0.36 in January from an upwardly revised 0.20 in December, according to the Federal Reserve Bank of Chicago, meaning growth was above its historical trend.
The relative MEI posted a positive 0.31 reading in January, off from an upwardly revised 0.45 reading in December.
Manufacturing contributed 0.31 to the index in January, after a 0.24 contribution in December, while contributing 0.36 to the relative MEI, down from 0.39 in December.
Construction and mining subtracted 0.14 from MEI in January, after subtracting 0.16 in December, and for relative MEI the sector subtracted 0.10 in each month.
The service sector contributed 0.03 to MEI in January after subtracting 0.01 in December, while subtracting 0.09 from relative MEI in January after a neutral December.
Consumer spending added 0.15 to MEI in January, up from 0.13 in December, while contributing 0.14 to relative MEI in January after a 0.16 contribution in December.
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.
