DALLAS, Dec. 1, 2020 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased in September to a level of 97.7. September's reading is 8 percent above the cyclical low of 90.2. The index averaged 124.4 points in 2019, 0.5 points above the average for all of 2018. August's index reading was 95.4.
Our California Economic Activity Index improved again in September, posting its third consecutive gain. The index components were mostly positive as nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, state total trade, the Dow Jones Technology Index and hotel occupancy rose in September. Industrial electricity demand was the only index component to decrease for the month. Our California Index reflects the reopening of the state's economy in September. However, in this unsettled economic environment, 6-8 weeks makes a big difference. We still expect to see gains in the index in October and November, but the narrative around the economic recovery is beginning to pivot heading into year-end. California's major cities are implementing stricter social mitigation efforts as a new surge in COVID-19 cases risks overwhelming the state's healthcare system. Even stricter stay-at-home orders could be implemented in counties that fall under the highest risk rating in the coming weeks. Currently, 51 of California's 58 counties fall under this designation. We will likely see additional pressure on non-essential indoor businesses in retail and hospitality related industries this fall and winter. The state is still dealing with high levels of unemployment. Emergency federal jobless benefits are set to runout at the end of December. The late-2020 drag on income will be a headwind for California household spending heading into early 2021.
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 Incorporated (NYSE: CMA) is a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico. Comerica reported total assets of $83.6 billion as of Sept. 30, 2020.
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SOURCE Comerica Bank
