Comerica Bank's Michigan Index Inched Up
The Michigan Economic Activity Index from Comerica Bank rose to 106.3 in November, marking a 22% increase from its historical low. This is the fifth consecutive month of growth, although the increase was marginal at 0.1%. Only three of nine sub-indexes, including nonfarm payrolls and house prices, saw improvement. Michigan's unemployment rate improved to 7.5% in December, but it remains higher than the national rate of 6.7%. Concerns persist as strains in the economy and social policies may impact the index in the upcoming months.
- Michigan Economic Activity Index rose to 106.3 in November, up 22% from historical low.
- Index has increased for five consecutive months.
- Improvement in nonfarm payrolls and house prices indicates some economic recovery.
- Unemployment rate in Michigan at 7.5%, higher than the U.S. rate of 6.7%.
- Payroll employment down 10.9% year-over-year, compared to U.S. decline of 6.2%.
- Six sub-indexes, including housing starts and industrial electricity demand, declined.
DALLAS, Jan. 29, 2021 /PRNewswire/ -- Comerica Bank's Michigan Economic Activity Index increased in November to a level of 106.3. November's reading was 22 percent higher than the historical low. The index averaged 117.8 points for all of 2019, 0.7 points below the index average for 2018. October's index reading was 106.2.
Our Michigan economic activity index increased for the fifth consecutive month in November, but the change was barely positive, up by just 0.1 percent. Only three out of nine sub-indexes improved in November. They were nonfarm payrolls, unemployment insurance claims (inverted), and house prices. The six declining sub-indexes were housing starts, industrial electricity demand, light vehicle production, total state trade, hotel occupancy and state sales tax revenue. We could easily see a decline in the Michigan Index at year end reflecting strains in the U.S. economy and social mitigation policies at the regional level. On the plus side, most national and regional manufacturing indicators improved in December, good news for manufacturing-intensive Michigan. Despite the positive news about manufacturing, labor market conditions in Michigan remain stressed. Through December, payroll employment for Michigan was down 10.9 percent from a year earlier, while the equivalent U.S. metric was down by 6.2 percent. Last spring, Michigan's unemployment rate spiked to 24 percent in April, well above the U.S. rate of 14.8 percent at that time. As of December, Michigan's unemployment rate had declined to 7.5 percent, only moderately above the U.S. rate of 6.7 percent. We look for improving conditions in Michigan this spring as vaccine distribution ramps up, and massive fiscal stimulus hits the economy along with very low interest rates.
The Michigan 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, auto assemblies, total trade, hotel occupancy and sales tax revenue. 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
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