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

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