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Comerica Bank's Michigan Index Improves

DALLAS, Aug. 27, 2019 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index increased in June to a level of 117.7. June's reading is 20 points, or 20 percent, above the index cyclical low of 97.9. The index averaged 118.4 points for all of 2018, 0.1 points above the index average for 2017. May's index reading was 117.5.

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

Comerica Bank's Michigan Economic Activity Index ticked up in June with an improvement in housing starts. Despite the good news in the headline number, most of the components of the Michigan Index are still flat-to-down over the last year. Even with a moderate gain in June, Michigan's housing starts sub-index remains well below its  2017 peak. Nonfarm employment was little changed in June and has shown no momentum this year. Likewise, unemployment insurance claims have trended up gradually since late 2018. House prices are still increasing, but at a reduced rate. Industrial electricity demand improved in June, but remains below the mid-2016 peak. Auto and light truck production improved in June, but was well below its mid-2015 peak. The total state trade index eased in June and is down from early 2018. Hotel occupancy declined for the third consecutive month in June and is well below its mid-2018 peak. State sales tax revenue also declined in June and remains below the peak from August 2018. In short, the components of our Michigan Index show that the state economy is losing momentum.  Fortunately for Michigan, U.S. consumer conditions remain healthy. U.S. consumer confidence was strong again in August as interest rates came down. This is a positive combination for auto sales. Business confidence has been challenged by the recent escalation of the U.S./China trade war.

The Michigan Economic Activity Index consists of nine variables, as follows: nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house price index, industrial electricity sales, auto assemblies, total trade, hotel occupancy and sales tax revenue. 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 one of the largest banking center networks in Michigan, is a subsidiary of Comerica Incorporated (CMA), a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Business Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Michigan and Texas, Comerica Bank locations can be found in Arizona, California, and Florida, with select businesses operating in several other states, as well as in Canada and Mexico.

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