The Midwest Economy Index declined to 0.51 in May from 0.72 in April, the Federal Reserve Bank of Chicago said Friday.
The relative MEI plunged to 0.09 from 0.65 in April.
Manufacturing added 0.32 to the index, after contributing 0.37 to the index in April, while adding 0.17 to the relative MEI, after a 0.28 contribution in April.
Construction and mining added 0.01 in the month, after a 0.10 contribution in April, while adding 0.01 to relative MEI index after a 0.14 addition in April.
The service sector MEI subtracted 0.04 after a 0.06 contribution the prior month, while subtracting 0.22 from relative MEI after a 0.07 contribution in April.
Consumer spending added 0.22 to MEI, after a 0.20 addition in April, while contributing 0.13 to relative MEI after a 0.15 addition the prior month.
By state, Wisconsin made the largest contribution in May, adding 0.22 to the index, Michigan contributed 0.13, Illinois added 0.11, Iowa contributed 0.07, and Indiana subtracted 0.01 from 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.