DALLAS, April 1, 2020 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased in January to a level of 126.5. January's reading was 29 points, or 29 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. December's reading was revised to 125.9.
Comerica Bank's California Economic Activity Index improved again in January. The index components were positive for the month. Nonfarm payrolls, housing starts, house prices, state total trade, the Dow Jones Technology Index and hotel occupancy were positive in January. Unemployment insurance claims (inverted) were negative for the month while industrial electricity demand went unchanged. However, this data does not reflect current conditions for the California economy. We expect to see a steep downturn in state-level economic data for March and April, particularly on the two coasts which have seen some of the strongest coronavirus outbreaks. California was one of the first in the nation to implement social mitigation efforts to slow the transmission of the coronavirus. Most sectors of the state economy will be impacted in the coming months. Domestic travel is significantly reduced, and foreign travel is currently being limited from China, Canada and Mexico. Production for major entertainment studios in southern California has halted due to shelter in place orders. Restaurants, bars, hotels and other services industries are also facing significant headwinds as people stay home. Preliminary estimates of California initial claims for unemployment insurance surged by 129,203 for the week ending March 21, signaling that the California unemployment rate will rise in March and April.
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