Current Economic Conditions in the Federal Reserve's Seventh District

Current economic conditions in the Federal Reserve’s Seventh District

Thom Walstrum Business Economist Federal Reserve Bank of Chicago November 6, 2017 *The views expressed in this presentation are my own and do not necessarily reflect those of the Federal Reserve Bank of Chicago or of the Federal Reserve System.

The Seventh District

November 6, 2017

Walstrum—Current conditions in the Seventh District

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Seventh District industrial profile Five highest location quotient industries

Primary Metal Manufacturing

2.2

Percent of all employment 0.6

Machinery Manufacturing

2.2

1.8

Transportation Equipment Manufacturing

2.0

2.2

Plastics & Rubber Products Manufacturing

1.9

0.9

Fabricated Metal Product Manufacturing

1.8

1.9

Industry

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Location quotient

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Seventh District industrial profile Largest employers with location quotient greater than 1.2

Transportation Equipment Manufacturing

Percent of all employment 2.2

Fabricated Metal Product Manufacturing

1.9

1.8

Machinery Manufacturing

1.8

2.2

Food Manufacturing

1.5

1.4

Truck Transportation

1.4

1.4

Industry

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Walstrum—Current conditions in the Seventh District

Location quotient 2.0

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Current conditions The Midwest Economy Index (MEI) • Summarizes 129 state and regional indicators in one number • Positive—above trend growth • Neutral—trend growth • Negative—below trend growth

• Available much sooner than GSP data • 1-month vs 6-month lag

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Current conditions

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Walstrum—Current conditions in the Seventh District

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Current conditions

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Current conditions

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Current conditions

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Walstrum—Current conditions in the Seventh District

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Current conditions

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Current conditions

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Current conditions

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Conclusions • The Seventh District economy is (still) driven by the manufacturing sector • Like most places, things are going pretty well right now • The pickup in global growth has helped long-struggling manufacturing industries like heavy machinery and steel • Some concern about the auto industry, though there are signs that conditions have stabilized

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