Comerica Bank's California Index Ticked Higher

Rhea-AI Summary

Comerica Bank's California Economic Activity Index rose to 101.0 in October, marking a 12% increase from its historical low of 90.3. This index has now improved for four consecutive months. Major contributors included nonfarm employment, housing starts, and the Dow Jones Technology Index. However, industrial electricity demand and total state trade faced declines. California's job recovery rate reached 46% by November, but progress varies across sectors with healthcare leading, while manufacturing lags. The resurgence of COVID-19 might impact economic activities into January.

Positive

• California Economic Activity Index increased to 101.0, up 12% from historical low.
• The index has improved for four consecutive months.
• California regained 46% of jobs lost during the spring closures.

Negative

• Industrial electricity demand and state total trade decreased in October.
• Job recovery is uneven across sectors, with manufacturing lagging.
• COVID-19 resurgence may lead to extended stay-at-home orders.

DALLAS, Jan. 5, 2021 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased in October to a level of 101.0. October's reading is 12 percent above the historical low of 90.3. The index averaged 124.4 points in 2019, 0.5 points above the average for all of 2018. September's index reading was 97.7.

Our California Economic Activity Index improved again in October, now up for the fourth consecutive month. The index components were generally positive in October. Six of the eight components saw gains for the month including nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, the Dow Jones Technology Index and hotel occupancy. Industrial electricity demand and state total trade were both negative for the month. The October acceleration in our California Index is consistent with the delayed reopening of the state's economy compared to other key Comerica states this fall. California's jobs recovery rate continued to improve through November with the state regaining 46 percent of the net jobs lost this spring. However, the gains have not been evenly distributed across all sectors.    Housing and healthcare related sectors appear to be leading the state's jobs recovery, while manufacturing and education services are lagging. This data does not take into account the surge in COVID-19 cases in November and the subsequent reimplementation of strict social mitigation policies in December. Limited-to-zero ICU capacity in the San Joaquin Valley and Southern California may result in longer stay at home orders for the two regions into at least mid-January. We still expect the widespread distribution of a vaccine to support stronger economic activity for the state in the second half of 2021.

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 Incorporated (NYSE: CMA) is 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 $83.6 billion at September 30, 2020.

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

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SOURCE Comerica Bank

FAQ

What is the current value of Comerica's California Economic Activity Index?

As of October, the California Economic Activity Index is 101.0.

How much did Comerica's California Economic Activity Index increase in October?

The index increased by 12% from the historical low of 90.3.

What sectors are leading California's job recovery according to Comerica's report?

Housing and healthcare sectors are leading the recovery, while manufacturing lags.

What might affect California's economic activity in January 2021?

The resurgence of COVID-19 cases and reimplementation of strict social policies may affect economic activity.

How much of the job losses has California recovered by November 2020?

California has regained 46% of the net jobs lost during the spring.