Comerica Bank's California Index Flattens
Feb 27, 2019
DALLAS, Feb. 27, 2019 /PRNewswire/ -- Comerica Bank's California Economic Activity Index was unchanged in December. December's reading is 27 points, or 27 percent, above the index cyclical low of 97.7. The index averaged 124.0 points in 2018, 2.9 points above the average for all of 2017. November's reading was revised to 124.3.
Comerica Bank's California Economic Activity Index was unchanged in December following a slight decline in November. California's economy has weakened in recent months. This is consistent with the rise in uncertainty seen nationally amongst consumers and businesses at the end of 2018. There were three positive index components in December including nonfarm employment, industrial electricity demand and hotel occupancy. The five negative components for the month include unemployment insurance (inverted), housing starts, house prices, total trade and the Dow Jones Tech Index. California labor data remains generally positive. The state continued to see net job growth through the end of 2018. However, the rise in unemployment insurance claims in December and January are a cautionary sign pointing to a loss of momentum in the state's labor market. In particular, the Los Angeles metropolitan area saw a moderation in hiring in 2018. Los Angeles also saw a gradual increase in its unemployment rate to 4.3 percent over 7 consecutive months ending in December. California housing data weakened at year-end. Our housing starts index was down 7 out of 12 months in 2018. Moderating house price growth and slightly lower mortgage rates will help ease some of the affordability issues. However, a number of headwinds for housing remain, including a cooler global economy, trade policy and increasing outmigration from California.
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
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