The Midwest Economy Index declined to negative 0.38 in August from a downwardly revised negative 0.11 in July, its lowest level since December 2009, according to the Federal Reserve Bank of Chicago.
The relative MEI posted a negative 0.30 reading in August, down from its upwardly revised positive 0.05 reading in July.
Manufacturing contributed 0.14 to the index in August, after a 0.32 contribution in July, while contributing 0.24 to the relative MEI, off from 0.49 in July.
Construction and mining subtracted 0.25 from MEI in August, after subtracting 0.30 in July, and for relative MEI the sector subtracted 0.18 in August, after subtracting 0.25 in July.
The service sector subtracted 0.07 from MEI in July after subtracting 0.02 in June, while subtracting 0.17 from relative MEI in July after contributing 0.02 in June.
Consumer spending took 0.07 from MEI in August, down from a 0.06 subtraction in July, while subtracting 0.15 from relative MEI, the same as in July.
All five states made negative contributions in August, with Iowa at negative 0.01, Michigan at negative 0.04, Indiana at negative 0.06, Illinois at negative 0.07, and Wisconsin at negative 0.20.
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.