DALLAS, Nov. 29, 2018 /PRNewswire/ -- Comerica Bank's California Economic Activity Index increased by 0.1 points in September to 124.0. September's reading is 26 points, or 27 percent, above the index cyclical low of 97.7. The index averaged 121.1 points in 2017, 2.5 points above the average for all of 2016. August's reading was revised to 123.9.
Comerica Bank's California Economic Activity Index saw a modest gain in September, up for the second consecutive month. Five of the eight factors were positive for September including nonfarm employment, unemployment insurance claims (inverted), house prices, total state trade and the Dow Jones technology stock index. The three negative factors were housing starts, industrial electricity demand and hotel occupancy. The labor components, house prices and tech sector valuations have been consistent positives for our index so far in 2018. However, California house prices, particularly in Southern California, are moderating on a year-year basis and tech stocks have declined recently. According to Case-Shiller data, San Diego home prices were up 4 percent in the 12 months ending in September, the slowest annual home price growth for that area since 2012. Los Angeles home prices were up 5.6 percent. San Francisco home prices were still up a strong 10 percent in September. The Dow Jones technology stock index slid into correction territory after peaking in early October and remains down 14.3 percent through November 27. Financial market volatility and rising borrowing costs may continue to weigh on tech stocks. Trade policy with China is another wildcard. The Trump Administration has threatened to increase tariffs on Chinese imports in January. The G-20 meeting in Buenos Aries this week may provide an opportunity for more U.S./China discussions on trade.
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..
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SOURCE Comerica Bank