DALLAS, Oct. 31, 2018 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased by 0.1 points in August to 123.8. August's reading is 26 points, or 26 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, 2.4 points above the average for all of 2016. July's reading was revised to 123.7.
Comerica Bank's California Economic Activity Index moved up slightly in August, posting its first monthly gain since March. Six of the eight sub-indexes were positive in August. They were nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, industrial electricity demand and the Dow Jones technology stock index. The two negative sub-indexes for August were total state trade and hotel occupancy. The slowdown in new construction has been a major drag on our California Index in recent months. Housing starts saw an early 2018 runup which quickly plateaued in March followed by four consecutive monthly declines between April and July. While the month-to-month movement has trended down since early spring, California housing starts remain up 17 percent year-to-date in August. California total trade also continues to slump, now down for six consecutive months. The announcement of a new trade deal between the U.S., Mexico and Canada is a positive development, yet it still needs to be ratified by each country. There is growing concern that the U.S. will impose tariffs on the remaining $257 billion of Chinese imports if progress is not made when President Trump meets with Xi Jinping next month. The headwinds which have impacted the state's housing and trade sectors are expected to persist into 2019, which will limit the upside potential to our California Index in the near-term.
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
