Comerica Bank’s Michigan Index Up AgainComerica Bank’s Michigan Economic Activity Index increased in April to a level of 119.0. April’s reading is 21 points, or 22 percent, above the index cyclical low of 97.9. The index averaged 118.2 points for all of 2017, one point above the index average for 2016. March’s index reading was revised to 118.7.
Comerica Bank’s Michigan Economic Activity Index increased in April, following a gain in March. This shows renewed economic momentum after stalling from December through February. The sub-indexes were mostly positive, seven increased and two decreased in April. Nonfarm payrolls, unemployment insurance claims (inverted), house prices, vehicle assemblies, state trade, hotel occupancy and state sales tax revenues were all positives for April. Housing starts and industrial electricity demand were negatives. Vehicle assemblies increased from February through April. However, we have already seen a large drop in assemblies for May, indicating that vehicle assemblies could become a drag on the Michigan Index by early summer. Trade actions by the U.S. and by our key trading partners, Canada and Mexico, have increased uncertainty for many Michigan businesses. Some businesses are responding by reducing borrowing and delaying investment. This could also weigh on hiring. The current economic drag from trade uncertainty is small. However, there is potential for more drag if trade wars escalate and if the auto sector is materially impacted. Higher gasoline prices are also a negative for Michigan’s auto industry. The national average gasoline price is about $2.85 per gallon, 60 cents higher now than a year ago. This eats into discretionary spending by U.S. households and may curb the demand for large SUVs and pickup trucks.
For a PDF version of this article, please click here: Michigan Index June 2018
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