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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

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