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Chicago Fed Midwest Manufacturing Index suggests slower above-trend growth in December 2020
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Index suggests slower, but still above-trend Midwest growth through December
The Midwest Economy Index (MEI), which approximates quarterly growth at a monthly frequency, fell to +1.26 in December from +1.83 in November. Contributions to the December MEI from three of the four broad sectors of nonfarm business activity and all five Seventh Federal Reserve District states decreased from November. The relative MEI moved down to +1.58 in December from +1.91 in November. Contributions to the December relative MEI from two of the four sectors and three of the five states decreased from November.
The manufacturing sector’s contribution to the MEI edged down to +0.36 in December from +0.41 in November. The pace of manufacturing activity decreased in Illinois, Iowa, and Michigan, but was unchanged in Indiana and Wisconsin. Manufacturing’s contribution to the relative MEI moved up to +0.35 in December from +0.29 in November.
The construction and mining sector contributed +0.18 to the MEI in December, up from +0.08 in November. The pace of construction and mining activity was faster in Illinois, Indiana, Iowa, and Wisconsin, but unchanged in Michigan. Construction and mining’s contribution to the relative MEI increased to +0.18 in December from a neutral value in November.
The service sector’s contribution to the MEI fell to +0.29 in December from +0.67 in November. The pace of service sector activity was down in all five states. The service sector’s contribution to the relative MEI decreased to +0.44 in December from +0.72 in November.
Consumer spending indicators contributed +0.44 to the MEI in December, down from +0.67 in November. Consumer spending indicators were, on balance, down in all five states. Consumer spending’s contribution to the relative MEI moved down to +0.61 in December from +0.90 in November.
Posted: January 29, 2021 Friday 08:30 AM