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Comerica Bank's California Index Dips

DALLAS, Sept. 25, 2019 /PRNewswire/ -- Comerica Bank's California Economic Activity Index decreased 0.1 percent in July to a level of 124.4. July's reading was 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. June's reading was 124.5.

Comerica logo. (PRNewsFoto/Comerica Bank) (PRNewsfoto/Comerica Bank)

Comerica Bank's California Economic Activity Index saw a slight dip in July. This followed four consecutive monthly increases from February to June. There were more index components down than up in July. The three positive sub-indexes for July were nonfarm employment, unemployment insurance claims (inverted) and total state trade. The four negative sub-indexes for the month were housing starts, industrial electricity demand, the Dow Jones Technology Index and hotel occupancy. The state house price index remained unchanged in July. The good news for California is that the state's labor market is still generating net new jobs. Year-over-year nonfarm employment reaccelerated following a slowdown in the pace of hiring at the end of 2018 and into early 2019. California unemployment insurance claims have also steadily declined from June to August. However, two proxies for business activity in the state appear a bit soft in recent months. California industrial demand for electricity was down in nine of the 12 months ending in July. California hotel occupancy also declined for the six consecutive months ending in July. Uncertainty in the technology sector is a wild card for our California Index heading into the end of 2019. Increased tariffs on consumer goods imported from China and the rising interest in the U.S. Congress to look into the business practices of technology companies may lead to more disruptions for the industry.

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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