DALLAS, Aug. 2, 2019 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased 0.2 percent in May to a level of 124.5. May's reading is 27 points, or 27 percent, above the index cyclical low of 97.8. The index averaged 124.0 points in 2018, 2.8 points above the average for all of 2017. April's reading was 124.2.
Comerica Bank's California Economic Activity Index improved again in May and has now increased for three consecutive months. At the beginning of 2019, the majority of the subcomponents in the California Index were negative. Fortunately, this trend has reversed course in recent months. There were six positive components in May. They included nonfarm employment, housing starts, house prices, industrial electricity demand, total state trade and the Dow Jones Technology Index. Only two components were negative for the month, unemployment insurance claims (inverted) and hotel occupancy. Prior to May's reading, our California Index had been range bound since January 2018. Over the last 17 months, the index has declined six times, gone unchanged three times and increased eight times. Steady job growth is moving from a stabilizing factor for California's economy in 2018 to an accelerating factor in 2019. The state added 171,700 jobs in the first six months of 2019, a step up from the 154,000 jobs added in the first six months of 2018. Over half of the jobs created in 2019 can be attributed to the construction, healthcare and hospitality industries. There is a risk that stronger job growth may only be temporary. Most of the major metropolitan areas across the state are experiencing very low unemployment rates. Tight labor markets and flat to negative net migration for the state means limited upside potential for California job growth going forward.
The California Economic Activity Index consists of eight variables, as follows: nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house price index, industrial electricity sales, total trade, technology stock index and hotel occupancy. All data are seasonally adjusted. Nominal values have been converted to constant dollar values. Index levels are expressed in terms of three-month moving averages.
Comerica Bank, with locations in the key California markets of San Francisco and the East Bay, San Jose, Los Angeles, Orange County, San Diego, Fresno, Sacramento, Santa Cruz/Monterey, and the Inland Empire, is a subsidiary of Comerica Incorporated (CMA). Comerica is a financial services company headquartered in Dallas, Texas, and strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth Management. Comerica focuses on relationships and helping businesses and people be successful..
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