The Midwest Economy Index slipped to 0.17 in May from a downwardly revised 0.28 in April, first reported as 0.29, the Federal Reserve Bank of Chicago said Tuesday.
The relative MEI dropped to 0.55 in May from a downwardly revised 0.86 in April, first reported as 0.95. The relative MEI indicates that growth in the region was somewhat higher than expected based on national economic growth.
Manufacturing contributed 0.04 to the index, after a 0.03 addition in April, while adding 0.23 to the relative MEI, after a 0.29 addition in April.
Construction and mining removed 0.05 in the month, after a 0.02 subtraction in April, while adding 0.06 to relative MEI after adding 0.11 to the index in April.
The service sector contributed 0.07 to MEI in after adding 0.15 the prior month, while contributing 0.27 to relative MEI after adding 0.42 in April.
Consumer spending added 0.11 to MEI, after adding 0.11 in April, while subtracting 0.01 from relative MEI, after a 0.05 addition in April.
By state, Michigan made the largest contribution in May, 0.23, with Indiana contributing 0.06. Iowa subtracted 0.03, while Illinois and Wisconsin each subtracted 0.04.
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.
