This morning, the Federal Reserve Bank of Chicago released July 2012 figures for its Midwest Economy Index (MEI), a weighted average of 129 indicators designed to measure growth in nonfarm business activity in the Midwest (IL, IN, MI, WI, IA).
The overall MEI decreased to -0.10 in July from +0.22 in June; this marks the first time in nine months that the index has shown below-trend economic growth in the Midwest. The relative MEI, a measure of Midwest economic activity relative to the nation, decreased to -0.01 in July from +0.61 in June, resulting in the relative MEI’s lowest value since October 2011.
Despite a negative overall contribution of -0.05 to the MEI in July, Illinois showed continued strength in the manufacturing sector, where it contributed +0.04 to the overall index, comparable to its +0.05 contribution last month. However, despite this positive contribution, month-over-month decreases in activity were still reported across all sectors in Illinois. The following chart illustrates Illinois’ and total Midwest contributions by sector to the MEI in July 2012.
The following chart illustrates five-year trend lines for the MEI and Relative MEI indexes. The MEI captures both national and regional factors driving Midwest growth, and the relative MEI provides a picture of Midwest growth conditions relative to those of the nation.
Source: Federal Reserve Bank of Chicago
The MEI is the regional counterpart to the Chicago Fed National Activity Index (CFNAI). For details on the most recent CFNAI, refer to World Business Chicago’s summary.
Please refer to the Chicago Federal Reserve Bank press release for a more detailed explanation.