DALLAS, Aug. 28, 2020 /PRNewswire/ -- Comerica Bank's
Michigan Economic Activity Index declined in June to a level of
86.6. June's reading is a new historical low for the index. The
index averaged 117.7 points for all of 2019, 0.9 points below the
index average for 2018. May's index reading was 90.3.
Our state economic activity indexes for June showed some further
deterioration in state economies. This is partially a result of
smoothing techniques that we use to process the data. We expect
Michigan and other states to show
positive overall numbers in July and August reflecting states'
relaxation of their social mitigation policies. Even as we see
stronger Q3 data for the U.S. and most states, we caution against
assuming that this is a V-shaped economic recovery. After relaxing
some social mitigation policies in late spring, many states
experienced an uptick in COVID-19 cases by mid-summer requiring
them to tighten policies again. Now with the school year starting,
we remain cautious about the potential for increased COVID-19 cases
this fall. Also, the demand destruction from the spring shutdowns
is still reverberating through the economy. We expect most states,
including Michigan, to face a
lingering high unemployment rate well into next year, and that will
be a drag on overall economic activity. In June, four of the nine
sub-indexes for Michigan were
positive. They were housing starts, house prices, light vehicle
production and hotel occupancy. The five negative sub-indexes were
nonfarm employment, unemployment insurance claims (inverted),
industrial electricity demand, total state trade and state sales
tax revenues. Despite the huge amount of economic churn that we are
seeing, housing markets and auto sales have been stronger than
expected, helped by low interest rates. However, shaky consumer
confidence is a risk to both consumer sectors.
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 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.
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