DALLAS, July 1, 2020 /PRNewswire/ -- Comerica Bank's California Economic Activity Index declined in April to a level of 109.1. April's reading was 12 points, or 11 percent, above the index cyclical low of 97.8. The index averaged 124.4 points in 2019, 0.5 points above the average for all of 2018. March's reading was to 122.2.
Our state economic activity indexes for April are showing the full impact of the coronavirus pandemic on state economies. California is facing a steep economic recession this spring. Our California Economic Activity Index fell 10.7 percent in April, after falling 3.4 percent in March. In April, 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. The house price index was the only positive component, yet even this metric saw mixed results across the state's major metropolitan areas. House prices rose in the Los Angeles and San Diego metropolitan areas, while San Francisco house prices declined in April. The economic data is expected to improve in May and June as the state began reopening parts of its economy. California job growth turned positive in May after ticking lower in April and March. Weekly state initial unemployment insurance claims, which are a proxy measurement for layoffs, are beginning to stabilize at around 240,000 per week through early June. However, this is well above the pre-COVID-19 average of 40,000 new claims per week. The state has also faced a surge in new COVID-19 cases in some major metropolitan areas in late June. This poses a serious downside risk to the state economy, especially if the state and local governments push for a return to strict 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 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 Commercial Bank, The Retail Bank, and Wealth Management. Comerica focuses on relationships and helping businesses and people be successful.
SOURCE Comerica Bank