DALLAS, April 29, 2020 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased in February to a level of 126.7. February's reading was 29 points, or 30 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. January's reading was revised to 126.4.
Due to reporting lags in state-level economic data, the February edition of our Comerica state economic activity indexes does not fully reflect the strong contraction in the U.S. economy this spring due to the global coronavirus pandemic. Our California Index increased in February, up for six consecutive months. Six of the eight sub-indexes were positive in February. They include nonfarm payrolls, unemployment insurance claims (inverted), housing starts, house prices, industrial electricity demand and the Dow Jones Technology Index. State total trade and hotel occupancy were negative for the month. The March data will show a strong deterioration in California economic activity. Layoffs accelerated in the second half of March as social mitigation efforts were implemented across the state. California's unemployment rate went from 3.9 percent in February to 5.3 percent in March. The April data will likely show a further deterioration in California economic activity. Stay-at-home orders at the state level have been in place since March 19 in California, with no definitive end date. However, L.A. county announced that their stay-at-home orders will remain in effect until at least May 15 and six Bay Area counties extended their orders through the end of May. Even after stay-at-home orders are eased, social distancing standards and changes to consumer behavior are expected to persist for the remainder of this year, weighing on some parts of the California economy.
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.