New economic reports show Michigan’s economy making flat to minimal growth.
The Federal Reserve Bank of Chicago, in its updated Midwest Economy Index released today, said Michigan’s economy grew slightly last month.
The state experienced slight growth in the areas of manufacturing, construction and services –– with flat consumer spending –– which nudged the Chicago Fed’s index for Michigan up 0.12 points. Manufacturing was the leading contributor to that growth, followed by services.
Any positive value in the index shows the state’s economy is growing faster than its long-term average rate of growth.
Despite the gains, Michigan’s economic expansion trailed the gains in the index for the neighboring states of Wisconsin and Illinois, which were up 0.18 and 0.15, respectively. The data show Michigan’s economy performing better than Iowa, which was up 0.04, and Indiana, which contracted by 0.03 points.
All told, the Midwest Economy Index moved up 0.44 points in February from 0.34 the previous month. The index takes a weighted average of 129 state and regional indicators to measure growth in nonfarm business activity.
Meanwhile, Comerica Bank’s latest Michigan Economic Activity Index released this week was unchanged for the month of January after three consecutive increases. Still, the index showed gains in five of the nine areas it tracks. Nonfarm payroll, house prices, industrial electricity demand, total state trade and hotel occupancy all made gains, while unemployment insurance claims, housing starts, auto production and state sales tax revenues were negative.
The Comerica Bank report notes recent precedent for the economy flatlining, which it did last summer amid declines in nonfarm payrolls and auto production.
While the early year “stall strikes a cautionary note,” Comerica Chief Economist Robert Dye noted in the report that nonfarm payrolls and the state’s labor market stand out as positive attributes.
Moreover, Dye observed that auto sales, which remain higher than expected, could be stronger than anticipated for the year. That optimism comes with a caveat, he added.
“A major wildcard this year is international trade,” Dye wrote, noting that more talks on reworking the North American Free Trade Agreement (NAFTA) are set for April.