Midwest manufacturing index shows growth

By Alejandra Cancino
Posted Jan. 27 at 7:52 a.m.

The Chicago Fed Midwest Manufacturing Index increased 0.3 percent in December to 81.5, according to data released Thursday by the Federal Reserve Bank of Chicago.

Three of the four regional sectors — steel, machinery and resource — experienced small increases from the prior month. Production in the auto sector decreased by .2 percent in December. Still, it was a 6 percent increase from its year-ago level.

Output in the steel sector increased by 1 percent, a 17.1 percent increase from December 2009. The national output also increased by 1 percent.

Production in the machinery sector increased by .5 percent, an 11.6 percent increase from its year-ago level. The nation’s production level increased by 1 percent.

Output in the resource sector increased by .3 percent, a 6.3 percent increase from December 2009. The region saw an increase in the food and chemical subsectors and a decrease in the wood, paper and nonmetallic subsectors. The national output increased by .4 percent.

For the first time in five months, the nation’s economic activity saw signs of growth in December. The Chicago Fed National Activity Index was .03 in December, up from -.40 in November. A reading of zero means the national economy is expanding at its historical trend rate of growth.

The increase was due to gains in employment and production indicators, such as the unemployment rate, which declined to 9.4 percent in December from 9.8 a month earlier.

The index’s three-month average increased to -.22 in December from -.36 a month earlier. Despite the increase, the economy grew below its historical trend for the seventh consecutive month.

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