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Index Shows Midwest Economic Activity Lagged Historical Trend in October

November 30, 2012

This morning, the Federal Reserve Bank of Chicago released October 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 improved to -0.43 in October from -0.55 in September, although the negative value indicates that the Midwest economy is still expanding at a rate below its historical trend. The relative MEI, a measure of Midwest economic activity relative to the nation, decreased to -0.14 in October from -0.05 in September.
All five states made negative contributions to the MEI in October. Due to negative contributions in the manufacturing (-0.03), construction (-0.03), services (-0.01), and consumer (-0.01) sectors, Illinois made a negative contribution overall (-0.08). The following chart illustrates contributions to the MEI by sector for Illinois and the Midwest as a whole in October 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.

For additional details on the most recent CFNAI-MA3, refer to World Business Chicago’s summary.
Source: Federal Reserve Bank of Chicago

Please refer to the Chicago Federal Reserve Bank press release for a more detailed explanation.