DALLAS, Sept. 27, 2018 /PRNewswire/ -- Comerica Bank's California Economic Activity Index decreased by 0.2 points in July to 123.5. July's reading is 26 points, or 26 percent, above the index cyclical low of 97.7. The index averaged 121.2 points in 2017, 2.4 points above the average for all of 2016. June's reading was 123.7.
Comerica Bank's California Economic Activity Index ticked down again in July. This is now the fourth consecutive monthly decline. Five of the eight sub-indexes were positive in July. They were nonfarm employment, unemployment insurance claims (inverted), house prices, industrial electricity demand and the Dow Jones technology stock index. The three negative sub-indexes for June were down again in July including housing starts, total state trade and hotel occupancy. The California economy has lost some momentum heading into the second half of 2018. Industries tied to construction and trade are facing major headwinds this year. Rising mortgages rates and home prices are eating into housing affordability. According to the California Association of Realtors, August sales of existing single-family homes were down 6.6 percent from a year ago. Construction of new homes has also slowed in recent months. Trade tensions with China continue to build as the Trump Administration announced a 10 percent tariff on an additional $200 billion worth of Chinese goods which went into effect on September 24. These tariffs are set to increase to 25 percent on January 1, unless negotiated otherwise. The Chinese government announced a 5 percent tariff on $60 billion worth of U.S. goods in response. The major positive factor for the California economy is job growth which accelerated from June to August. California's unemployment rate remained low at 4.2 percent in August.
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