The Midwest Economy Index slipped to negative 0.18 in May from an unrevised positive 0.03 in April, the Federal Reserve Bank of Chicago reported Friday.
The relative MEI dropped to negative 0.51 in May from an upwardly revised negative 0.10 in April, first reported as negative 0.21. The negative relative MEI indicates that growth in the region was moderately lower than expected.
Manufacturing contributed 0.12 to the index in May, after a 0.19 addition in April, while adding 0.03 to the relative MEI, after a 0.17 contribution in April.
Construction and mining took 0.17 from MEI in the month, after subtracting 0.08 in April, while subtracting 0.13 from relative MEI in May after being neutral in April.
The service sector subtracted 0.16 from MEI in May after taking 0.07 the prior month, while taking 0.44 from relative MEI after subtracting 0.23 in April.
Consumer spending contributed 0.03 to MEI, after subtracting 0.01 in April, while adding 0.03 to relative MEI, after subtracting 0.03 in April.
By state, Iowa made the largest contributions in May, 0.09, with Michigan adding 0.08, Indiana subtracted 0.05, Illinois took away 0.13, and Wisconsin subtracted 0.16.
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.