Dallas/July 26, 2023 – The Comerica Michigan Economic Activity Index jumped 5.2% annualized in the three months through April, although it was still down 0.4% from a year earlier after declines between June and February. Six of the index’s nine components increased in April, while three fell.
Employment rose by a solid 10,800. While continuing claims for unemployment insurance were higher, the unemployment rate fell to the lowest since early 2020’s pre-pandemic low.
Auto and light truck assemblies are back to the highest since mid-2020 as the chip shortage fades in the rear-view. Industrial electricity consumption was up 2% from a year earlier in April, although it was down slightly from March after big increase in that month. Housing starts have been volatile in early 2023 and in April were about a fifth below their level a year earlier. With listings tight, house prices rose sharply in March and April, and have now fully reversed their decline from mid-2022 to early-2023.
Michigan’s economy grew by 1.8% in 2022, slightly below the national average of 2.1%. The trend held in the first quarter, with Michigan’s GDP growth of 1.8% a tad below the national average of 2.0%. Michigan’s economy will likely slow along with the national economy in 2023. High interest rates will slow output and sales in credit-intensive sectors, such as housing, manufacturing, and commercial real estate investment. The auto industry will likely outperform other sectors of durable consumer goods manufacturing as car dealers restock inventories, but even it is not impervious to the effects of high interest rates and inflation on consumer demand.
The Comerica Michigan Economic Activity Index is a monthly composite indicator of state economic activity. The Index provides a wholistic advance view of the state of Michigan’s economy, using economic data that are available about one quarter earlier than real GDP is released. The index is comprised of nine components: Nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house prices, industrial electricity sales, auto and light truck production, foreign trade, hotel occupancy, and sales tax revenue. All data are seasonally adjusted with nominal values converted to constant dollar values as appropriate. To filter out month-to-month volatility in the index components, the index is calculated from the three-month moving averages of its components. Values for a minority of components are projected from the prior months’ release due to the timing of data releases.
Comerica Bank, a subsidiary of 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, one of the 25 largest U.S. financial holding companies, focuses on building relationships and helping people and businesses be successful. Comerica provides more than 400 banking centers across the country with locations in Arizona, California, Florida, Michigan and Texas. Founded 174 years ago in Detroit, Michigan, Comerica continues to expand into new regions, including its Southeast Market, based in North Carolina, and Mountain West Market in Colorado. Comerica has offices in 17 states and services 14 of the 15 largest U.S. metropolitan areas, as well as Canada and Mexico. Comerica reported total assets of $90.8 billion at June 30, 2023. Learn more about how Comerica is raising expectations of what a bank can be by visiting www.comerica.com, and follow us on Facebook, Twitter, Instagram and LinkedIn.
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