DALLAS, Jan. 3, 2020 /PRNewswire/ -- Comerica Bank's
California Economic Activity Index increased in October to a level
of 125.0. October's reading was 27 points, or 28 percent, above the
index cyclical low of 97.8. The index averaged 124.0 points in
2018, 2.8 points above the average for all of 2017. September's
reading was revised to 124.6.
Comerica Bank's California Economic Activity Index improved
again in October, its third consecutive monthly gain. Helping to
drive the gains in October were nonfarm employment, unemployment
insurance claims (inverted), housing starts, house prices, the Dow
Jones Technology Index and hotel occupancy. The two negative
components in October were industrial electricity demand and total
state trade. The California Index was range bound for most of 2018
and the first three quarters of 2019. The index appears to have
broken out of this range in the last quarter of 2019, consistent
with a California economy growing
at a moderate pace. California's
housing sector improved heading into Q4 of last year, supported by
steady job growth and lower mortgage rates. The Federal Reserve's
75 basis points worth of cuts on short-term borrowing helped put
downward pressure on mortgages last year. However, the benefit to
California's housing sector may
only be marginal in 2020 as the Fed expects to keep policy rates
unchanged this year. Trade activity remains a headwind for the
state's economy. State total trade has now declined 15 out of the
last 20 months. The passage of USMCA in the House of
Representatives is a positive development for California trade. However, the timeline for
when the bill will be passed by the Senate remains unknown. The
signing of a Phase 1 trade deal between the U.S. and China should also be positive for California trade.
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.
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