The Midwest Economy Index grew to 0.48 in November from an upwardly revised 0.33 in November, first reported as 0.27, the Federal Reserve Bank of Chicago reported Friday.
The reading was the highest since May 2012.
The relative MEI rose to 0.15 in November from a downwardly revised 0.13 in November, first reported as 0.24. The positive relative MEI indicates that growth in the region was higher than expected.
Manufacturing contributed 0.29 to the index in December, after a 0.26 addition in November, while adding 0.23 from the relative MEI, after a 0.28 contribution in November.
Construction and mining added 0.01 to MEI in the month, after subtracting 0.02 in November, while subtracting 0.01 from relative MEI in November after deleting 0.03 from the index in November.
The service sector contributed 0.03 to MEI in December after subtracting 0.01 the prior month, while subtracting 0.17 from relative MEI after taking 0.18 in November.
Consumer spending contributed 0.15 to MEI, after adding 0.10 in November, while contributing 0.10 to relative MEI, after a 0.05 addition in November.
By state, Illinois made the largest contribution in December, 0.18, with Indiana adding 0.16, Wisconsin contributing 0.12, and Michigan adding 0.03. Iowa subtracted 0.02.
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.
