Comerica Bank's California Index Ticks Up

October 31, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index increased by 0.1 points in August to 123.8. August’s reading is 26 points, or 26 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, 2.4 points above the average for all of 2016. July’s reading was revised to 123.7.

Comerica Bank’s California Economic Activity Index moved up slightly in August, posting its first monthly gain since March. Six of the eight sub-indexes were positive in August. They were nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices, industrial electricity demand and the Dow Jones technology stock index. The two negative sub-indexes for August were total state trade and hotel occupancy. The slowdown in new construction has been a major drag on our California Index in recent months. Housing starts saw an early 2018 runup which quickly plateaued in March followed by four consecutive monthly declines between April and July. While the month-to-month movement has trended down since early spring, California housing starts remain up 17 percent year-to-date in August. California total trade also continues to slump, now down for six consecutive months. The announcement of a new trade deal between the U.S., Mexico and Canada is a positive development, yet it still needs to be ratified by each country. There is growing concern that the U.S. will impose tariffs on the remaining $257 billion of Chinese imports if progress is not made when President Trump meets with Xi Jinping next month. The headwinds which have impacted the state’s housing and trade sectors are expected to persist into 2019, which will limit the upside potential to our California Index in the near-term.

For a PDF version of this report, click here: Comerica Bank's California Index Ticks Up

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank's California Index Slides

September 27, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index decreased by 0.2 points in July to 123.5. July’s reading is 26 points, or 26 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, 2.4 points above the average for all of 2016. June’s reading was 123.7.

Comerica Bank’s California Economic Activity Index ticked down again in July. This is now the fourth consecutive monthly decline. Five of the eight sub-indexes were positive in July. They were nonfarm employment, unemployment insurance claims (inverted), house prices, industrial electricity demand and the Dow Jones technology stock index. The three negative sub-indexes for June were down again in July including housing starts, total state trade and hotel occupancy. The California economy has lost some momentum heading into the second half of 2018. Industries tied to construction and trade are facing major headwinds this year. Rising mortgages rates and home prices are eating into housing affordability. According to the California Association of Realtors, August sales of existing single-family homes were down 6.6 percent from a year ago. Construction of new homes has also slowed in recent months. Trade tensions with China continue to build as the Trump Administration announced a 10 percent tariff on an additional $200 billion worth of Chinese goods which went into effect on September 24. These tariffs are set to increase to 25 percent on January 1, unless negotiated otherwise. The Chinese government announced a 5 percent tariff on $60 billion worth of U.S. goods in response. The major positive factor for the California economy is job growth which accelerated from June to August. California’s unemployment rate remained low at 4.2 percent in August.

For a PDF version of this article, please click here: Comerica Bank's California Index Slides

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank's California Index Declines

August 29, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index decreased by 0.1 points in June to 123.7. June’s reading is 26 points, or 27 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, two and three-fifths points above the average for all of 2016. May’s reading was 123.8.

Comerica Bank’s California Economic Activity Index eased again in June. This is now the third consecutive monthly decline. However, the declines in the sub-indexes were less widespread in June than in May. Five of the eight sub-indexes were positive in June. They were nonfarm employment, unemployment insurance claims (inverted), house prices, industrial electricity demand and the Dow Jones technology stock index. The three negative sub-indexes in June were housing starts, total state trade and hotel occupancy. Uncertainty on trade is a headwind for the state economy. California saw a run-up in total trade in early 2018, as some companies and consumers tried to finalize purchases before tariffs were implemented. The dollar value of state total trade has now declined for four consecutive months and was below year-ago levels in June. The U.S. and Mexico struck a preliminary accord on trade earlier this week which is a positive sign. However, it is still uncertain how or if Canada will join the accord. Trade negotiations with China continued to deteriorate as both the Trump Administration and the Chinese government implemented tariffs on an additional $16 billion worth of goods on August 23. California’s housing sector has also slowed in recent months. Rising interest rates are adding to the state’s housing affordability problem. According to the Mortgage Bankers Association, the rate on a 30 year fixed rate mortgage was at 4.81 percent in mid-August.

For a PDF version of this article, please click here: Comerica Bank's California Index Declines

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank's California Index Dips Again

August 1, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index decreased by 0.2 points in May to 123.8. May’s reading is 26 points, or 27 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, two and three-fifths points above the average for all of 2016. April’s reading was revised to 124.0.

Comerica Bank’s California Economic Activity Index eased again in May, after a small dip in April. Three out of eight sub-indexes were positive in May. They were nonfarm employment, house prices and the Dow Jones technology stock index. Unemployment insurance claims (inverted), housing starts, total state trade and hotel occupancy were negatives in May. The industrial electricity demand sub-index was unchanged. The Trump Administration’s aggressive stance toward trade negotiations adds to risks for the California economy. Activity at key California ports reportedly surged in June as business tried to get ahead of increasing tariffs with China. We could see the opposite side of that later this year. International trade is a key economic support for Southern California. According to the Port of Los Angeles, one out of every nine jobs in Southern California is connected to trade, for a total of about a million jobs. China is the Port of Los Angeles’ biggest trading partner. Trade with China totaled $145 billion for the Port of LA in 2017, more than half of the port’s total trade for 2017. The Port of Long Beach has a similar exposure to China. Residential real estate markets in Southern California are showing signs of stress. Home sales were weak in June. According to the National Association of Realtors, foreign purchases of U.S. homes have declined this year. High prices, a strong dollar and trade tensions may all be playing a part in reduced foreign home purchases.

For a PDF version of this report, click here: Comerica Bank's California Index Dips Again 

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations.  The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team.  We are not offering or soliciting any transaction based on this information.  We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation.  Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed.  Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.  

 

 

Read More

Comerica Bank's California Index Declines | June 2018

June 27, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Index DeclinesComerica Bank’s California Economic Activity Index decreased by 0.2 points in April to 123.9. April’s reading is 26 points, or 27 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, two and three-fifths points above the average for all of 2016. March’s reading was revised to 124.1.

Comerica Bank’s California Economic Activity Index ticked down in April. This follows a slowdown in momentum in February and March. The sub-indexes were mixed for April. Five of the eight components were negative for the month including unemployment insurance claims (inverted), housing starts, industrial electricity demand, total state trade and the Dow Jones Tech Stock Index. Two of the eight components were unchanged in April including nonfarm payroll employment and hotel occupancy. There was only one positive component for the month which was house prices. This is not the first time that our California Index has gone negative in recent history. In the past 24 months, the index has declined five times and gone sideways once. However, this is the first time that the loss of momentum appears to be widespread across the sub-indexes. The stalwart for the California economy coming out of the recession was steady job gains. Yet, nonfarm payrolls have added just 86,600 jobs in the first five months of 2018. This is the weakest start to a year in terms of job growth since 2011. There is growing uncertainty surrounding the impact of trade disputes as the U.S. and its major trading partners announce additional tariff and counter-tariff measures. The technology sector is one area where we are seeing that uncertainty play out as stock prices exhibit volatility heading into the summer.

 

For a PDF version of this article, please click here: California Index June 2018

 

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations.  The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team.  We are not offering or soliciting any transaction based on this information.  We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation.  Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed.  Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.  

 

Read More

Comerica Bank’s California Index Increases

June 4, 2018 by By Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index was up by 0.1 points in March to 124.0. March’s reading is 26 points, or 27 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, two and three-fifths points above the average for all of 2016. February’s reading was revised up to 123.9.

Comerica Bank’s California Economic Activity Index ticked up slightly in March, following an upward revision to February’s index reading. The sub-indexes were mixed for March. Six of the eight sub-indexes were positive including nonfarm payroll employment, unemployment insurance claims (inverted), housing starts, house prices, industrial electricity demand and the Dow Jones Tech Stock Index. The two sub-indexes that were negative for March were state total trade and hotel occupancy. While our California Index showed only a modest gain in March, the longer-run trends of the underlying data series remain positive and are consistent with an ongoing moderate economic expansion for California this year. Limiting the upside growth to state economic activity in recent months was the slowdown in the pace of hiring in February and March. However, the state added a net 39,200 jobs in April, building some momentum for the California economy heading in the second half of 2018. Construction is the fastest growing sector in terms of the pace of hiring, with one-in-four jobs gained in the state attributed to the sector since the start of 2018. This is consistent with other positive data on the state’s housing sector. Our housing starts sub-index reading for March was the highest level since early 2007. Home prices also continue to climb, up 7.6 percent in San Diego, 8.1 percent in L.A. and 11.2 percent in San Francisco year-over-year in March.

California Economic Activity Index

Explanatory Note:

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 Bank, with locations in the key California markets of San Francisco and the East Bay, San Jose, Los Angeles, Orange County, San Diego, Fresno, Sacramento, Santa Cruz/Monterey, and the Inland Empire, is a subsidiary of Comerica Incorporated (NYSE: CMA). Comerica is a financial services company headquartered in Dallas, Texas, and strategically aligned into three major business segments: the Business Bank, the Retail Bank, and Wealth Management. Comerica focuses on relationships and helping businesses and people be successful.

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.

For a PDF version of this report click here: Comerica Caifornia Index

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank’s California Index Levels Out

April 26, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index was up by 0.1 points in February to 123.8. February’s reading is 26 points, or 27 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, two and three-fifths points above the average for all of 2016.

Comerica Bank’s California Economic Activity Index was essentially unchanged in February. The sub-indexes were mixed for the month. Six of the eight sub-indexes were positive in February including nonfarm payroll employment, unemployment insurance claims (inverted), house prices, industrial electricity demand, state total trade and the Dow Jones Tech Stock Index. The two sub-indexes that were negative for February were housing starts and hotel occupancy. It has been seven months since our California Index last declined. In early 2018, some of the major components of our index are showing volatility. Last month we spoke about the growing volatility in tech-sector stocks. The Dow Jones Tech Stock Index remains off of March highs as of the last full week of April. Now we are seeing signs of more volatility in the key state nonfarm payrolls series. California nonfarm payrolls grew at a robust pace averaging a net 47,000 jobs per month from October through January. Since then, California gained a net 1,200 jobs in February and posted a net job loss of 7,200 jobs in March as employment weakened in the construction and retail trade sectors. This is the first net monthly job loss for California since June 2016. With the California unemployment rate currently at an all-time low of 4.3 percent, we expect to see job growth moderate somewhat as the pool of job seekers shrinks. Even with more volatility and smaller monthly gains, we expect nonfarm payrolls to be a net positive for our California Index in 2018.

For a PDF version of this report click here: CA-Index-0418.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank’s California Index Up Again

March 28, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index grew by 0.6 percent in January to 123.7. January’s reading is 26 points, or 27 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, two and three-fifths points above the average for all of 2016. December’s index reading was revised to 123.0.

Comerica Bank’s California Economic Activity Index continued to improve in January. Our California Index is now up for the fifth consecutive month following last year’s late-summer stall. Gains remained widespread with all eight sub-indexes positive in January. Anchoring the California economy is ongoing state job growth which maintained momentum into the start of 2018. California added an average of 31,450 jobs per month in the first two month of 2018. This is slightly above the average 30,500 jobs per month in 2017. California house prices continued to grow at a fast pace. Year-over-year house price growth began to accelerate in 2017 as Bay Area house prices rebounded. Sustained demand for housing in the state’s major metropolitan areas is supporting residential construction activity, which has steadily improved over the last four months. While California job growth and the housing sector have been consistently positive in recent months, we expect some components of our California Index to be more volatile this year. Following a strong run in January, the Dow Jones Tech Stock Index dipped in February and volatility began to show up again in late March. California trade will also be another wildcard this year as the Trump Administration announced tariffs on imported steel and aluminum which went into effect on March 23. Canada and Mexico were exempted from the tariffs. The eighth round of NAFTA negotiations are tentatively scheduled for April.

For a PDF version of this report click here: CA-Index-0318.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank’s California Index Improves

February 28, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index grew by 0.5 percent in December to 122.9. December’s reading is 25 points, or 26 percent, above the index cyclical low of 97.8. The index averaged 121.0 points in 2017, two and two-fifths points above the average for all of 2016. November’s index reading was revised to 122.3. 

Comerica Bank’s California Economic Activity Index ticked up again in December, posting its fourth consecutive monthly gain. The improvement in economic activity at the end of 2017 was spread across most sectors. Six of the eight components were positive in December, including nonfarm payroll employment, housing starts, house prices, total state trade, the Dow Jones Tech Stock Index and hotel occupancy. The two negative components were unemployment insurance claims (inverted) and industrial electricity consumption in December. The recent improved performance of the California economy was driven by strong nonfarm payroll gains, up 2.1 percent or 342,000 jobs in 2017. This is faster average job growth than the U.S. as a whole, which saw nonfarm payrolls grow by just 1.5 percent last year. Solid job gains are leading to tighter labor markets across most of the state’s major metro areas. This has pushed the overall California unemployment rate to an all-time low at 4.5 percent as of December. Job growth is also pushing up demand for California housing. The supply of single-family homes throughout the state has been tight since the end of the recession. While single-family housing starts have been growing since 2012, it has not been enough to keep up with demand. This will keep upward pressure on single-family house prices and makes declining housing affordability an ongoing issue for the state.

For a PDF version of this report click here: CA_Index_0218

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank’s California Index Increases

February 1, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index grew by 0.7 percent in November to 122.2. November’s reading is 24 points, or 25 percent, above the index cyclical low of 97.8. The index averaged 118.6 points in 2016, two and three-tenths points above the average for all of 2015. October’s index reading was revised to 121.4.

Comerica Bank’s California Economic Activity Index in-creased again in November. This is now the third consecutive monthly gain following last summer’s slowdown in activity. Seven out of eight indicators were positive in November, including payroll employment, unemployment insurance claims (inverted), housing starts, house prices, total state trade, the Dow Jones Tech Stock Index and hotel occupancy. Industrial electricity consumption was the only negative indicator in November. The California economy built up positive momentum in the latter portion of 2017. The factors that were a drag on state economic activity last summer are moving towards being slight positives heading into early 2018. The hotel occupancy index stalled for most of 2017, but has since seen two consecutive monthly gains. Tourism and business activity, spurred on by rising global and domestic growth, will support the state’s accommodations industry in 2018. Total trade has also improved in recent months, supported by a slightly weaker trade weighted U.S. dollar and rising energy prices, which boost both import and export values for petroleum products. The wildcard for state trade will be NAFTA negotiations, which concluded its sixth round earlier this week with no comprehensive resolution. The next round of negotiations will take place in February. It may be more complicated to strike a deal if the negotiations are extended into the Mexico presidential and U.S. mid-term elections.

For a PDF version of this report click here: CA_Index_0118

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank’s California Index Ticks Up

January 3, 2018 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index grew by 0.1 percent in October to 121.3. October’s reading is 24 points, or 24 percent, above the index cyclical low of 97.8. The index averaged 118.6 points in 2016, two and three-tenths points above the average for all of 2015. September’s index reading was revised to 121.1.

Comerica Bank’s California Economic Activity Index in-creased again in October, after pulling out of a late summer stall in September. The index has increased in five out of the last seven months. The trends in California look generally positive heading into 2018, however the October 2017 reading of 121.3 is only 1.7 percent above the level for October 2016. Payroll employment, house prices, the Dow Jones Tech Stock Index and hotel occupancy were positives in October. Unemployment insurance claims (inverted), housing starts and total state trade were negatives. Industrial electricity consumption was neutral in October. The state enduredrecord-setting wildfires in 2017 and is exposed to key Trump Administration policy changes, including tax reform and trade agreement renegotiations. The state’s important residential construction sector will face some challenges in 2018. Even before the fall wildfires, California’s construction industry was facing a labor shortage. Trade groups report ongoing difficulties in finding workers. Also, we expect mortgage interest rates to gradually increase in 2018, reducing housing affordability. Tax reform will have both positive and negative implications for housing in California. Limits on the mortgage interestdeduction and on state and local tax deductions will be headwinds. However, the generally business friendly tax changes and expected reduction to personal taxes will be positives.

For a PDF version of this report click here: CA_Index_1217.

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank’s California Index Increases

December 5, 2017 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index grewby 0.2 percent in September to 121.2. September’s readingis 23 points, or 24 percent, above the index cyclical lowof 97.8. The index averaged 118.6 points in 2016, two andthree-tenths points above the average for all of 2015. August’sindex reading was revised down to 120.9.

Comerica Bank’s California Economic Activity Index increasedin September, reversing August’s losses. After an inconsistent spring and summer hiring season, the stateposted consecutive monthly job gains in September and October. California job gains have firmed overall in thesecond half of 2017, adding a net 160,000 jobs from Julyto October. Ongoing improvements in the state’s labormarket will support the California economy through yearend 2017. The September index results were mostly positive,with five out of eight sub-indexes improving for themonth. The positives were nonfarm employment, unemploymentinsurance claims (inverted), house prices, totalstate trade and the Dow Jones Tech Stock Index. The twonegative factors for the month were industrial electricitydemand and hotel occupancy. Housing starts were unchangedfor the month. We expect the California economyto grow at a moderate pace as it navigates the uncertaintysurrounding tax reform. Congressional republicans hopeto have a final tax bill to President Trump by the end ofthe year. Corporations are expected to benefit from lowertax rates. However, uncertainty remains on the individualside of tax reform and its impact on household spending.In particular, the final standing of the mortgage interestdeduction, the state and local tax deduction and the alternative minimum tax is unknown. These issues may bemore impactful in high income states like California.

For a PDF version of this report click here: CA_Index_1117

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank’s California Index Eases

October 31, 2017 by Robert A. Dye, Ph.D., Daniel Sanabria

Comerica Bank’s California Economic Activity Index decreased by 0.2 percent in August to 121.0. August’s reading is 23 points, or 24 percent, above the index cyclical low of 97.8. The index averaged 118.6 points in 2016, two and three-tenths points above the average for all of 2015. July’s index reading was 121.2. 

Comerica Bank’s California Economic Activity Index decreased slightly, by 0.2 percent, in August, breaking a string of four consecutive monthly gains. Statewide job creation has been somewhat erratic in recent months. The September payroll data shows a bounce back after a small decline in August, so that is a positive for the state economy this fall. The August index results were mixed, with five out of eight sub-indexes positive for the month. The positives were nonfarm employment, house prices, industrial electricity demand, total state trade and the Dow Jones Tech Stock Index. The three negative factors for the month were unemployment insurance claims (inverted), housing starts and hotel occupancy. We do not expect the recent wildfires in California to exert a significant downward drag on the state economy. Rather, the rebuilding effort after the fires is likely to boost overall economic activity in some parts of the state. Overall residential real estate conditions remain tight. However, the robust price gains in the San Francisco area through 2015 have eased, bringing Bay Area house price appreciation through mid-2017 closer to the moderate-to-strong rates seen in Los Angeles and San Diego. We look for ongoing positive economic conditions in California through the end of this year.

For a PDF version of this report click here: CA_Index_1017

The articles and opinions in this publication are for general information only, are subject to change, and are not intended to provide specific investment, legal, tax or other advice or recommendations. The information contained herein reflects the thoughts and opinions of the noted authors only, and such information does not necessarily reflect the thoughts and opinions of Comerica or its management team. We are not offering or soliciting any transaction based on this information. We suggest that you consult your attorney, accountant or tax or financial advisor with regard to your situation. Although information has been obtained from sources we believe to be reliable, neither the authors nor Comerica guarantee its accuracy, and such information may be incomplete or condensed. Neither the authors nor Comerica shall be liable for any typographical errors or incorrect data obtained from reliable sources or factual information.

Read More

Comerica Bank's California Index Extends Gains

June 29, 2017 by Robert A. Dye, Ph.D, Daniel Sanabria

Comerica Bank’s California Economic Activity Index increased by 0.9 percentage points in April to reach 129.7. April’s reading is 46 points, or 54 percent, above the index cyclical low of 84.1. The index averaged 122.4 points in 2016, two and three-fifths points above the average for all of 2015. March’s index reading was 128.8.  

“Our California Economic Activity Index increased in April, for the 14th consecutive month. As we have
seen in recent months, the results for April were mixed, but consistent with moderate overall growth in the state economy. Five out of eight index components were positive in April. They were unemployment insurance claims (inverted), housing starts, house prices, hotel occupancy and the Nasdaq 100 Technology stock index. State exports and defense spending were negatives in April, while nonfarm payrolls were neutral. Job growth in the state has clearly slowed down in 2017. For the year ending in April, California payroll employment had gained 1.4 percent, slightly below the national average of 1.5 percent growth,” said Robert Dye, Chief Economist at Comerica Bank. “The previously red-hot San Francisco housing market is showing signs of cooling as area housing prices eased in April.”

For a PDF version of the California Economic Activity Index click here:  California_Index_0617.pdf

 

Read More

Comerica Bank’s California Index Flattens on Mixed Components

January 5, 2016 by Kyle Grace

Comerica Bank’s California Economic Activity Index was unchanged in October, maintaining a level of 119.5. October’s reading is 35 points, or 42 percent, above the index cyclical low of 84.1. The index averaged 113.7 points for all of 2014, seven and two-fifths points above the average for all of 2013. September’s index reading was 119.5.

“Our California Economic Activity Index stabilized in October after three consecutive months of declines from July through September. Four index components were positive in October, including payroll employment, unemployment insurance claims (inverted), house price index and hotel occupancy. State exports, housing starts, U.S. defense spending and the NASDAQ 100 tech stock index were negative factors in October,” said Robert Dye, Chief Economist at Comerica Bank. “A strong positive for the state is payroll employment which has increased every month since April 2011. Consistent job growth is a strong support to California households and to the state’s housing industry.”

 

Read More