DALLAS, Nov. 26, 2019 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased slightly in September to a level of 124.5. September'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. August's reading was 124.4.
Comerica Bank's California Economic Activity Index saw only a modest increase in September. This follows a four-month-stall as the California Index went unchanged from May through August. There were more sub-index factors up than down in September. The six positive components for the month included nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, industrial electricity demand and the Dow Jones Technology Index. The two negative components in September were state total trade and hotel occupancy. While the index components look more positive for the month, the long-run trends still indicate a slowing in California economic activity. Key factors in the recent slowdown have been the declines in new home construction, international trade and hotel occupancy, all of which peaked in early 2018. The slowdown in industrial electricity demand also implies a decline in overall industrial activity. A combination of factors are working together to weigh down the state's economy. Affordability remains a headwind for homeownership in the state's major metropolitan areas. U.S. trade policy is still in limbo as passage of USMCA and a trade deal with China remain elusive. Natural disasters are also taking a toll on the state's economy. Rolling black-outs and damage due to wildfires are expected to result in significant economic and wealth losses for some California residents and businesses in 2019.
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 (NYSE: 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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SOURCE Comerica Bank