DALLAS, April 1, 2019 /PRNewswire/ -- Comerica Bank's California Economic Activity Index declined by 0.3 percent in January. January's reading is 26 points, or 26 percent, above the index cyclical low of 97.8. The index averaged 124.0 points in 2018, 2.8 points above the average for all of 2017. December's reading was revised to 123.8.
Comerica Bank's California Economic Activity Index declined by 0.3 percent in January. This followed a 0.4 percent decline December. The California Index saw a strong downward revision in the housing starts component for December. In January, only two of the index components were positive including nonfarm employment and hotel occupancy. The six negative index components for the month were unemployment insurance (inverted), housing starts, house prices, industrial electricity demand, total trade and the Dow Jones Tech Index. Our California Index has now posted three consecutive monthly declines. Leading the declines were tech stocks prices which were pummeled from October to December. Tech stock prices have since rebounded through March and will be a net positive for our index in the coming months. California housing data has also been sluggish in recent months. Total housing starts peaked at a 131,000 unit annual rate in March 2018. That number dropped to just a 60,000 unit annual rate in December 2018. The slowdown in housing activity has led to a dramatic downshift in home price growth across California's major regions. According to the S&P Case-Shiller, home prices were up just 2.9 percent in Los Angeles and 1.3 percent in San Diego for the 12 months ending in January. Year-over-year home price growth in San Francisco has abruptly declined from 10.6 percent in August to 1.7 percent in January.
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..
SOURCE Comerica Bank