NEW YORK – The Midwest Economy Index slid to positive 0.03 in July from positive 0.36 in June, according to the Federal Reserve Bank of Chicago, as the index approached its historical trend for the first time in 17 months.
The Midwest was outperforming the nation as a whole, the Fed said, as the relative MEI posted a positive 0.85 reading in July, down from positive 1.05 reading in June.
Manufacturing contributed positive 0.42 to the index in July, after a positive 0.58 gain in June, while contributing positive 0.90 to the relative MEI, down from positive 0.96 in June.
Construction and mining contributed negative 0.14 in July, after negative 0.15 in June to MEI, and for relative MEI the sector added 0.03 after subtracting 0.03 in June.
The service sector subtracted 0.17 from MEI in July after contributing negative 0.08 in June, while contributing negative 0.07 to relative MEI in July after positive 0.04 in June.
Consumer spending subtracted 0.08 from MEI in July, off from positive 0.01 in June, while contributing negative 0.01 to relative MEI in July after positive 0.07 in June.
By state, Iowa showed the strongest growth, followed by Michigan, Wisconsin, Illinois, and Indiana.
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.
