Comerica Bank's California Index Inches Higher

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DALLAS, Oct. 27, 2021 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased in August to a level of 118.4. August's reading is 27.6 percent above the historical low of 92.8 set in June 2020. The index averaged 107.9 points in 2020, 18.8 points below the average for all of 2019. July's index reading was 118.3.

Comerica logo. (PRNewsFoto/Comerica Bank) (PRNewsfoto/Comerica Bank)
Comerica logo. (PRNewsFoto/Comerica Bank) (PRNewsfoto/Comerica Bank)

Our California Economic Activity Index grew by 0.1 percent in August. This marks the fourteenth consecutive monthly gain in the California Index. Four of the index components improved for the month including nonfarm employment, unemployment insurance claims (inverted), house prices and enplanements. Housing starts, industrial electricity demand, state total trade, hotel occupancy and state revenues fell in August. The growth rate of the California Index reached a strong 3.0 percent in May but has trended lower through August. We expect to see soft data again in September as households altered spending behavior and businesses postponed a broader return to office due to the surge in COVID-D cases. The end to enhanced unemployment benefits in early-September also weighed on household incomes for the month. We look for the California Index to return to stronger growth as COVID cases continue to trend lower and labor markets improve through yearend. The rapid recovery of the overall U.S. economy is causing ongoing supply chain bottlenecks at California ports as increased demand for goods outpace capacity for storage and distribution. To address congestion issues, the Ports of Los Angeles and Long Beach announced that they will begin fining shipping companies for containers that remain at terminals for too long starting in November. We still expect supply chain constraints to persist well into 2022.

The California Economic Activity Index consists of nine variables, as follows: nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house price index, industrial electricity sales, total trade, hotel occupancy, enplanements and state revenues. 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 is a subsidiary of Comerica Incorporated (NYSE: CMA), 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 $94.5 billion as of September 30, 2021.

To subscribe to our publications or for questions, contact us at ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/insights. Follow us on Twitter: @Comerica_Econ.

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