Comerica Bank's California Index Moves Higher
Comerica Bank's California Economic Activity Index rose to 110.9 in April, marking a 19.6% increase from June 2020's low of 92.7. This is the tenth consecutive month of improvement, driven by gains in nonfarm employment, house prices, and industrial electricity demand. However, housing starts and state revenues declined. The labor market has averaged 124,000 new jobs monthly since February, and the recovery is expected to boost GDP growth despite risks from supply constraints and potential COVID variants.
- California Economic Activity Index increased to 110.9 in April.
- Index shows a 19.6% rise from its historical low in June 2020.
- Ten months of consecutive improvement in the index.
- Average of 124,000 net new jobs created monthly since February.
- Housing starts and state revenues declined in April.
- Supply constraints negatively affecting autos and housing.
- Potential risks from COVID variants could impact economic growth.
DALLAS, June 24, 2021 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased in April to a level of 110.9. April's reading is 19.6 percent above the historical low of 92.7 set in June 2020. The index averaged 107.9 points in 2020, 18.9 points below the average for all of 2019. March's index reading was revised to 108.1.
Our California Economic Activity Index improved for the tenth consecutive month in April. Seven of the nine sub-indexes gained for the month including nonfarm employment, unemployment insurance claims (inverted), house prices, industrial electricity demand, state total trade, hotel occupancy and enplanements. Housing starts and state revenues declined for the month. There are a lot of positives for the California economy this year. The state's labor market improved through May with a strong rebound in hiring after the winter slump. It has averaged 124,000 net new jobs per month since February. California's labor market recovery will receive additional lift this summer as the state drops most of the pandemic restrictions on businesses. The state's travel and hospitality sector saw increased activity in April. Both enplanements and hotel occupancy reached their highest levels since last spring. Demand for single-family housing was strong in April and is supportive of new construction this year. While we expect California to see robust GDP growth in 2021, two risk factors may limit the state's economic expansion over the next couple of quarters. First, supply constraints are weighing heavily on some businesses, including autos and housing-related. This is pushing strong price gains, eroding affordability and weighing on spending. The second factor is the possibility of more transmissible COVID variants and the potential for a higher healthcare burden this fall.
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
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