DALLAS, Jan. 3, 2020 /PRNewswire/ -- Comerica Bank's
Michigan Economic Activity Index declined in October to a level of
117.8. October's reading is 20 points, or 20 percent, above the
index cyclical low of 97.9. The index averaged 118.6 points for all
of 2018, 0.2 points above the index average for 2017. September's
index reading was revised to 118.0.
Comerica Bank's Michigan Economic Activity Index ticked down
again in October as the GM/UAW strike impacted key data series. We
expect the Michigan Index to rebound in November, showing the
positive impact of the strike's early-November resolution. For
October, only two out of nine components of the Michigan Index were
positive. They were housing starts and state sales tax revenue.
Residential construction lifted in many areas in late 2019 as home
sales improved following the Federal Reserve's cut of key interest
rates through last summer and fall. The house price sub-index and
the hotel occupancy sub-index were both unchanged in October. The
five declining components in the Michigan Index for October were
nonfarm employment, unemployment insurance claims (inverted),
industrial electricity demand, light vehicle production and total
state trade. All five declining components were weighed down by the
6-week-long strike at GM. Even though striking workers are not
eligible for unemployment insurance benefits, the production
shutdown at GM backed up their supply chain, resulting in temporary
layoffs of non-striking workers. Many of those workers were
eligible for unemployment insurance benefits. The expected
ratification of the USMCA trade deal is also good news for
Michigan's manufacturing sector.
As is the expected signing of a Phase 1 trade deal with
China.
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 (NYSE: 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.
To subscribe to our publications or for questions, contact us at
ComericaEcon@comerica.com. Archives are available at
http://www.comerica.com/insights. Follow us on Twitter:
@Comerica_Econ.
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SOURCE Comerica Bank