DALLAS, March 31, 2021 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased in January to a level of 108.9. January's reading is 21 percent above the historical low of 90.2 set in June 2020. The index averaged 105.5 points in 2020, 18.8 points below the average for all of 2019. December's index reading was revised to 106.8.
Our California Economic Activity Index rose again in January, marking its seventh consecutive monthly gain. The underlying data was less positive than the headline number. Multiple sectors were likely adversely impacted by statewide social mitigation restrictions which were still in place for most of January. Five of the eight index components were negative in January including nonfarm employment, housing starts, industrial electricity demand, state total trade and hotel occupancy. The index was pulled higher for the month due to strong improvements in unemployment insurance claims (inverted), house prices and the Dow Jones Technology Index. California house prices in particular are experiencing strong appreciation due to solid demand and low levels of available single-family houses on the market. Despite a challenging start to 2021, the outlook remains positive for the state economy. California household incomes will be supported this spring by both a recovering labor market and recently passed stimulus bills which included extended unemployment benefits and direct payments to households. The acceleration in the vaccine rollout this spring improves the probability of a wider reopening of the state economy as we head into the summer months. We expect to see a pickup in business activity as regions move out of the more restrictive social mitigation tiers and businesses expand capacity to keep up with strong demand.
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 $88 billion as of Dec. 31, 2020.