The Federal Reserve Bank of Chicago’s Midwest Economy Index declined in July to -0.10, down from +0.22 in June. This is the first time in nine months the index, which indicates Midwest growth, has dipped to below average.
The Midwest Economy Index measures 129 state and regional indicators for Illinois, Indiana, Iowa, Michigan and Wisconsin. An index of 0 means the area’s economy is expanding at a rate consistent with historical trends, while positive readings indicate above-average growth and negative numbers indicate below-average growth.
The MEI also lays out the contribution of some industries to the index. Manufacturing’s contribution was 0.33 in July, down from 0.45 in June, as the pace of manufacturing activity declined across the board. Construction and mining contributed -0.30 last month, down from -0.28 in June, though the pace of mining and construction activity increased in Wisconsin.
The service sector contributed -0.07 to the MEI last month, down from -0.02 in June, as the pace remained steady in Wisconsin. Finally, consumer spending contributed -0.06 to the index in July, down from 0.07 in June, with consumer spending indicators down for all five states.
Wisconsin led way in Midwest growth, however, with a 1.8 percent gross state product growth forecast year-to-date. Indiana’s forecast was 1.6 percent GSP growth, while Iowa had 1.5 percent, Illinois recorded 1.3 percent and Michigan had 0.6 percent GSP growth forecast for the year.