DALLAS (STL.News) – Comerica Bank’s California Economic Activity Index increased 0.2 percent in April to a level of 124.2. April’s reading is 26 points, or 27 percent, above the index cyclical low of 97.8. The index averaged 124.0 points in 2018, 2.8 points above the average for all of 2017. March’s reading was revised to 123.9.
Comerica Bank’s California Economic Activity Index improved in April. This is the second straight monthly gain for the index following four consecutive monthly declines. Five of the eight index components were positive in April. They included nonfarm employment, unemployment insurance claims (inverted), housing starts, house prices and the Dow Jones Technology Index. The three negative components for the month were industrial electricity demand, state total trade and hotel occupancy. Our California Index gained momentum heading into spring following a winter slump. Driving the recent gains was a pick up in housing activity in March and April. The recent decline in mortgage rates is supporting demand from opportunistic home buyers. House prices in the San Francisco and Los Angeles metropolitan areas saw a slight increase in April. However, it is too early to say that we have passed the worst of the slowdown in California house price appreciation. We expect low borrowing costs to be a mild positive for California housing this year, but homebuilders remain cautious heading into the summer months. The state’s housing market still has to contend with rising unemployment rates across its major metropolitan areas and the outflow of people and businesses to other parts of the country. We still expect the California economy to see a moderate economic expansion in 2019 anchored by steady job growth.
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.