Comerica Bank's California Index Improves Again

Rhea-AI Summary

The California Economic Activity Index from Comerica Bank rose to 116.5 in June, marking a 25.5% increase from the historical low of 92.8 in June 2020. This improvement of 2.3% in June represents a sustained upward trend over the past year. Notably, six sub-indexes, including nonfarm employment and housing starts, saw growth, while three sub-indexes experienced declines, including unemployment claims. Despite these gains, California's employment recovery remains incomplete, with only 58% of jobs lost during the pandemic restored by July.

Positive

• California Economic Activity Index increased to 116.5, a substantial recovery from pandemic lows.
• The index has shown consistent improvement over the past year.

Negative

• California has only recovered 58% of jobs lost during the pandemic as of July.
• 590,000 more individuals remain unemployed compared to February 2020 levels.

DALLAS, Aug. 23, 2021 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased in June to a level of 116.5. June's reading is 25.5 percent above the historical low of 92.8 set in June 2020. The index averaged 107.8 points in 2020, 18.9 points below the average for all of 2019. May's index reading was revised at 113.9.

Our California Economic Activity Index improved by 2.3 percent in June. The index has been up or unchanged for the last 12 months. In June, six of the sub-indexes increased including nonfarm employment, housing starts, house prices, hotel occupancy, enplanements and state revenues. Three sub-indexes fell for the month. They were unemployment insurance claims (inverted), industrial electricity demand and state total trade. Our California Index saw strong monthly gains through the spring as regional restrictions on business activity moderated. We expect to see further gains in our index in July, reflecting improvement in the state's labor market. However, California is still well shy of pre-pandemic levels of employment. As of July, the state has recovered just 58 percent of the net jobs lost in the Spring of 2020. In July, the level of unemployed workers remained 590,000 above the February 2020 level. This creates a potential fiscal cliff for California households as special federal unemployment benefits conclude in early-September. The winddown of pandemic related stimulus as a new surge of COVID cases is taking hold pushes back our timeframe for renormalizing consumer and business activity. With widespread vaccine availability, state and local officials and businesses are implementing new mandates to avoid a return to restrictions seen during the winter wave. It is still unclear if these policies will mitigate a further rise in cases over the coming weeks.

The California 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, total trade, hotel occupancy, enplanements and state revenues. 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 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 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 $88.4 billion at June 30, 2021.

To subscribe to our publications or for questions, contact us at ComericaEcon@comerica.com. Archives are available at www.comerica.com/insights. Follow us on Twitter: @Comerica_Econ.

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SOURCE Comerica Bank

FAQ

What is the current California Economic Activity Index as reported by CMA?

The current California Economic Activity Index reported by Comerica Bank is 116.5.

How much did the California Economic Activity Index increase in June 2021?

The index increased by 2.3% in June 2021.

What percentage of jobs lost during the pandemic has California recovered as of July 2021?

As of July 2021, California has recovered only 58% of the jobs lost during the pandemic.

What are the key components contributing to the California Economic Activity Index?

Key components include nonfarm payroll employment, housing starts, house price index, and state revenues.

How does the California Economic Activity Index for June 2021 compare to its historical low?

June's index is 25.5% above the historical low of 92.8 set in June 2020.