DALLAS, May 29, 2020 /PRNewswire/ -- Comerica Bank's California Economic Activity Index declined in March to a level of 122.2. March's reading was 24 points, or 25 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. February's reading was revised to 126.5.
Our state economic activity indexes are beginning to show the impact of the coronavirus pandemic on state economies in this edition which is based on data from March. The California Economic Activity Index fell 3.4 percent in March, ending six months of steady gains. In March, house prices were the sole component that was positive for the month. 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. We expect the California Index and all of our other state indexes to show further significant deterioration when the April data is available next month. Driving the downturn in California's economy are job losses which became more widespread in April. The state lost a staggering 2.3 million additional jobs in April and the unemployment rate ticked up to 15.5 percent. We expect the California economy to improve this summer as the state continues to reopen in the coming weeks. However, the high level of unemployment and the unknown biological factors surrounding the ongoing pandemic will weigh on consumer confidence. Consumer behavior is unlikely to revert back quickly to what it was prior to the virus outbreak. Also, businesses may find it challenging, if not impossible, to be profitable at partial capacity, resulting in reduced worker demand or even more permanent closures.
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