DALLAS, July 29, 2020 /PRNewswire/ -- Comerica Bank's California Economic Activity Index declined in May to a level of 96.8. May's reading marks a new historical low for the index. The index averaged 124.4 points in 2019, 0.5 points above the average for all of 2018. April's reading was revised to 108.9.
Our state economic activity indexes for May show the historic decline in economic activity this spring due to the coronavirus pandemic. The California Economic Activity Index declined 11.1 percent in May, after falling 10.8 percent in April. In May, seven out of eight components moved lower. The negative components were nonfarm payrolls, unemployment insurance claims (inverted), housing starts, industrial electricity demand, state total trade, the Dow Jones Technology Index and hotel occupancy. Similar to April, the sole positive component for May was the house price index. The Bureau of Economic Analysis confirmed that the California economy dipped into recession with state real GDP declining at a 4.7 percent annualized rate in Q1. As of May, the California Index was 23 percent below its February peak, consistent with an even steeper decline in the state's real GDP in Q2. We expect our California Index to improve over the coming months reflecting the limited re-opening of the California economy in early summer. California housing markets in particular improved in June. According to the California Association of Realtors, existing single-family home sales jumped 42.4 percent in June, following three consecutive monthly declines. However, it is important to note that we are entering a new phase of economic uncertainty. The recent surge in COVID-19 cases in California puts the expected economic recovery in 2020H2 at risk due to the return of stricter social mitigation policies.
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 Incorporated (NYSE: CMA) is a financial services company headquartered in Dallas, Texas, and strategically aligned by three business segments: The Commercial Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico. Comerica reported total assets of $84 billion at June 30, 2020 and celebrated its 170th anniversary in August 2019.
SOURCE Comerica Bank