The Midwest Economy Index narrowed to negative 0.15 in December from a downwardly revised negative 0.20 in November, first reported as negative 0.17, the Federal Reserve Bank of Chicago said Friday.
The relative MEI climbed to 0.28 in December from a downwardly revised 0.08 in November, first reported as 0.13. The relative MEI indicates that growth in the region was somewhat higher than what would be expected based on national economic growth.
Manufacturing subtracted 0.21 from the index, after a 0.21 subtraction in November, while subtracting 0.05 from the relative MEI, after a 0.09 subtraction in November.
Construction and mining added 0.06 in the month, after a 0.06 subtraction in November, while contributing 0.14 to the relative MEI index in December after subtracting 0.01 from the index in November.
The service sector took 0.04 from MEI in December after a 0.04 subtraction the prior month, while adding 0.06 to relative MEI after a 0.05 contribution in November.
Consumer spending added 0.08 to MEI, after adding 0.10 in November, while contributing 0.13 to relative MEI, after a 0.12 addition in November.
By state, Michigan made the largest contribution in December, adding 0.06, while Indiana contributed 0.01 to the index. Illinois deleted 0.11, Iowa subtracted 0.07, and Wisconsin subtracted 0.01.
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.
