DALLAS, July 1, 2020 /PRNewswire/ -- Comerica
Bank's California Economic Activity Index declined in April to a
level of 109.1. April's reading was 12 points, or 11 percent, above
the index cyclical low of 97.8. The index averaged 124.4 points in
2019, 0.5 points above the average for all of 2018. March's reading
was to 122.2.
Our state economic activity indexes for April are showing the
full impact of the coronavirus pandemic on state economies.
California is facing a steep
economic recession this spring. Our California Economic Activity
Index fell 10.7 percent in April, after falling 3.4 percent in
March. In April, seven out of eight components moved lower. The
negative components were nonfarm payrolls, unemployment insurance
claims (inverted), housing starts, industrial electricity demand,
state total trade, the Dow Jones Technology Index and hotel
occupancy. The house price index was the only positive component,
yet even this metric saw mixed results across the state's major
metropolitan areas. House prices rose in the Los Angeles and San
Diego metropolitan areas, while San Francisco house prices declined in April.
The economic data is expected to improve in May and June as the
state began reopening parts of its economy. California job growth
turned positive in May after ticking lower in April and March.
Weekly state initial unemployment insurance claims, which are a
proxy measurement for layoffs, are beginning to stabilize at around
240,000 per week through early June. However, this is well above
the pre-COVID-19 average of 40,000 new claims per week. The state
has also faced a surge in new COVID-19 cases in some major
metropolitan areas in late June. This poses a serious downside risk
to the state economy, especially if the state and local governments
push for a return to strict social mitigation policies.
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 Commercial 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