Comerica Bank's Michigan Index Declined Through October
DALLAS, Jan. 31, 2023 /PRNewswire/ -- The Comerica Michigan Economic Activity Index fell 2.9% annualized in the three months through October. The Index was up a solid 3.6% from the same month of last year. Only four of the index's nine components increased in October.
Employment rose in the month – but so did continuing claims for unemployment insurance, painting a mixed picture of the state's job market.
Car and light truck assemblies rose to 10.5 million units at a seasonally adjusted annualized pace in October from 10.3 million in September and topped 10 million for the seventh consecutive month. October's run rate was just shy of the 10.6 million units assembled in 2019 prior to the pandemic, a further sign that supply chain disruptions are finally abating; assemblies slowed in November and December, though, which will weigh on the index in the next few releases. Electricity consumption by the state's industrial sector declined in October.
House prices declined for the fifth consecutive month and were down 1.9% from the peak in May. Housing starts rose for a third consecutive month and were still up 21.7% from a year earlier, even after a precipitous decline in July. Housing is likely to weaken further near-term as high prices and soaring mortgage rates weigh on demand.
Michigan's economy will likely slow along with national and global economies in 2023. Rising interest rates will slow credit-intensive sectors, such as housing and commercial real estate investment. The auto industry will likely outperform other types of durable consumer goods manufacturing as car dealers restock inventories, but even it could face a lower speed limit on its rebound due to higher interest rates.
The Comerica Michigan Economic Activity Index is a monthly composite indicator of state economic activity. The Index provides a wholistic advance view of the state of Michigan's economy, using economic data that are available about one quarter earlier than real GDP is released. The index is comprised of nine components: Nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house prices, industrial electricity sales, auto and light truck production, foreign trade, hotel occupancy, and sales tax revenue. All data are seasonally adjusted with nominal values converted to constant dollar values as appropriate. To filter out month-to-month volatility in the index components, the index is calculated from the three-month moving averages of its components. Values for a minority of components are projected from the prior months' release due to the timing of data releases.
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 Michigan, California, Florida and Arizona. Additionally, Comerica has select businesses operating in Canada and Mexico. Comerica reported total assets of $85.4 billion as of Dec. 31, 2022.
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SOURCE Comerica Bank