Comerica Bank’s California Economic Activity Index grew by 0.9 percentage points in November to a level of 126.3. November’s reading is 42 points, or 50 percent, above the index cyclical low of 84.1. The index averaged 119.8 points for all of 2015, six and two-fifths points above the average for all of 2014. October’s index reading was 125.5.
“Our California Economic Activity Index was up again in November, its 10th consecutive monthly increase. Gains were broad-based. Six out of eight index components were positive, including nonfarm employment, unemployment insurance claims (inverted), defense spending, home prices, hotel occupancy and technology stock prices. Housing starts eased for the month, as did state exports. Job growth in the state has been faster than the national average, with November employment up 2.3 percent over the previous 12 months. Steady job creation brought the state unemployment rate down to 5.3 percent in November, still above the U.S. average of 4.6 percent for the month. Even though the state’s unemployment rate remains above the U.S. average, labor market conditions are getting tight, putting upward pressure on wages. Wage pressure is also being stoked by the January 1st increase in the state’s minimum wage to $10.50 per hour,” said Robert Dye, Chief Economist at Comerica Bank. “Northern California real estate markets cooled in the second half of 2016, but San Francisco home prices were still up 5.3 percent in November, compared with a year earlier.”
For a PDF version of the California Economic Activity Index click here: California_Index_0117.