Midwest Economy Index (MEI)
The Midwest Economy Index (MEI) was a monthly index designed to measure growth in nonfarm business activity in the Seventh Federal Reserve District. It served as a regional counterpart to the Chicago Fed National Activity Index (CFNAI).
Midwest Economy Index Discontinued After June 2021
Given the discontinuation of several underlying data series and the extreme impact of the Covid-19 pandemic on many of the remaining series since March 2020, our researchers’ standard approach for estimating the Midwest Economy Index (MEI) has become increasingly ineffective. As of early May 2021, we determined that it would not be appropriate to publish the MEI’s results after the middle of the year. Therefore, the Chicago Fed has discontinued the MEI following the June 30, 2021, release.
Latest MEI Release
The Midwest Economy Index (MEI), which approximates quarterly growth at a monthly frequency, moved up to +0.69 in May from +0.63 in April.
The MEI is a weighted average of 129 state and regional indicators encompassing the entirety of the five states in the Seventh Federal Reserve District (Illinois, Indiana, Iowa, Michigan, and Wisconsin). The index measures growth in nonfarm business activity based on indicators of four broad sectors of the Midwest economy: 1) manufacturing, 2) construction and mining, 3) services, and 4) consumer spending.
Over long periods, growth in Midwest economic activity has historically tended to coincide with growth in national economic activity. However, over shorter periods of time this has not always been the case. To highlight such differences, we construct two separate index values. 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.
A zero value for the MEI has been associated with the Midwest economy expanding at its historical trend (average) rate of growth; positive values with above-average growth (in standard deviation units); and negative values with below-average growth. A zero value for the relative MEI has been associated with the Midwest economy growing at a rate historically consistent with the growth of the national economy; positive values with above-average relative growth (in standard deviation units); and negative values with below-average relative growth.