DALLAS, Feb. 23, 2023 /PRNewswire/ -- The Comerica Michigan Economic Activity Index fell 4.3% annualized in the three months through November, but was still up a solid 2.9% from a year-ago. Only three of the index's nine components increased in November.
Employment rose in the month – but so did continuing claims for unemployment insurance for the third consecutive month, painting a mixed picture of the state's job market.
Auto and light truck assemblies declined to 9.9 million units at a seasonally-adjusted annualized pace from 10.7 million in October. Assemblies were above the 10 million annualized pace in the previous seven months, indicating supply chain issues are finally abating. Electricity consumption by the state's industrial sector rose modestly in November after declines in the previous two months.
Bucking four months of declines, house prices rose in November, albeit by a modest 0.1%. However, housing starts cratered by nearly 35% from October. The number of starts in November was also the lowest recorded since the depths of the pandemic in May 2020. Housing is likely to weaken in the near-term as high house prices and soaring mortgage rates weigh on demand.
Michigan's economy will likely slow along with national and global economies in 2023. High interest rates will slow output and sales in credit-intensive sectors, such as housing and commercial real estate investment. The auto industry will likely outperform other sectors of durable consumer goods manufacturing as car dealers restock inventories, but even it is not impervious to a decline in demand from high interest rates and inflation.
The Comerica Michigan Economic Activity Index is a monthly composite indicator of state economic activity. The Index provides a wholistic advance view of the state of Michigan's economy, using economic data that are available about one quarter earlier than real GDP is released. The index is comprised of nine components: Nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house prices, industrial electricity sales, auto and light truck production, foreign trade, hotel occupancy, and sales tax revenue. All data are seasonally adjusted with nominal values converted to constant dollar values as appropriate. To filter out month-to-month volatility in the index components, the index is calculated from the three-month moving averages of its components. Values for a minority of components are projected from the prior months' release due to the timing of data releases.
Comerica Bank is a subsidiary of Comerica Incorporated (NYSE: CMA), 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 Michigan, California, Florida and Arizona. Additionally, Comerica has select businesses operating in Canada and Mexico. Comerica reported total assets of $85.4 billion as of Dec. 31, 2022.
SOURCE Comerica Bank