DALLAS, Jan. 3, 2019 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased by 0.3 points in October to 124.4. October's reading is 27 points, or 27 percent, above the index cyclical low of 97.7. The index averaged 121.1 points in 2017, 2.5 points above the average for all of 2016. September's reading was revised to 124.0.
Comerica Bank's California Economic Activity Index increased for the third consecutive month in October, countering a four-month slide through July. Six of the eight sub-indexes were positive for October, including nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, total state trade and hotel occupancy. Industrial electricity demand was unchanged and the Dow Jones Tech Index fell for the month. Tech stocks will continue to be a drag over November and December. The U.S.-Mexico-Canada Trade Agreement was signed by the leaders of the three countries in Buenos Aires on November 30. This will reduce some uncertainty for California businesses. However, the new trade deal must still be ratified legislatively by the three countries. Even with a clearer line of sight regarding trade deals, exporting businesses may soon feel softer demand from their international buyers. China manufacturing data continues to weaken, with negative implications for Asian economies generally. High house prices and higher mortgage rates are still weighing on housing affordability in California. The recent decline on mortgage rates through year-end 2018 may provide temporary support to home sales, but lack of affordable housing remains a key constraint for many California cities. Even with a strong tech sector, the state is still losing business and population to its lower cost neighbors.
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..
SOURCE Comerica Bank