DALLAS, Feb. 26, 2020 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased in December to a level of 126.1. December's reading was 28 points, or 29 percent, above the index cyclical low of 97.8. The index averaged 124.5 points in 2019, 0.5 points above the average for all of 2018. November's reading was 125.5.
Comerica Bank's California Economic Activity Index improved again in December, now up for four consecutive months. Helping to drive the positive momentum was a rebound in housing activity. California housing starts were up to a 126,000 unit rate in December, the highest reading since March 2018. Our California house price index also broke above the range first established in 2018. San Francisco house prices in particular advanced again in December after the year-over-year change in house prices contracted from August to October. Lower mortgage rates and ongoing job gains in California's labor market helped to support housing markets at year end 2019. The sub-components for our California Index were generally positive in December. The positives included nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, the Dow Jones Technology Index and hotel occupancy. The negatives were industrial electricity demand and state-total trade, both of which were down for the majority of 2018 and 2019. Trade uncertainties are reduced with the Phase 1 trade deal with China and passage of USMCA. However, coronavirus is likely to weigh on global trade in the first half of 2020. Disruptions to supply chains and weaker global demand will be a drag on California trade-related sectors. Restrictions on global travel into the U.S. is also expected to adversely impact the state's tourism industry in the first half of this year.
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
