DALLAS, July 29, 2020 /PRNewswire/ -- Comerica
Bank's California Economic Activity Index declined in May to a
level of 96.8. May's reading marks a new historical low for the
index. The index averaged 124.4 points in 2019, 0.5 points above
the average for all of 2018. April's reading was revised to
108.9.
Our state economic activity indexes for May show the historic
decline in economic activity this spring due to the coronavirus
pandemic. The California Economic Activity Index declined 11.1
percent in May, after falling 10.8 percent in April. In May, 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. Similar to April, the
sole positive component for May was the house price index. The
Bureau of Economic Analysis confirmed that the California economy dipped into recession with
state real GDP declining at a 4.7 percent annualized rate in Q1. As
of May, the California Index was 23 percent below its February
peak, consistent with an even steeper decline in the state's real
GDP in Q2. We expect our California Index to improve over the
coming months reflecting the limited re-opening of the California economy in early summer.
California housing markets in
particular improved in June. According to the California
Association of Realtors, existing single-family home sales jumped
42.4 percent in June, following three consecutive monthly declines.
However, it is important to note that we are entering a new phase
of economic uncertainty. The recent surge in COVID-19 cases in
California puts the expected
economic recovery in 2020H2 at risk due to the return of stricter
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 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
$84 billion at June 30, 2020 and celebrated its 170th
anniversary in August 2019.
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