DALLAS, Jan. 22,
2024 /PRNewswire/ -- The Comerica California
Economic Activity Index was unchanged for a second consecutive
month in the three months through October, and was up 1.6% from a
year earlier. Six components of the index rose, while three
declined.
Employment rose by 34,500, but the pace of job growth
year-to-date has been roughly half of 2022's. Additional signs that
the Golden State's job market is cooling include elevated
continuing claims for unemployment insurance, holding above 400,000
for the sixth consecutive month, and a 0.7% rise in the
unemployment rate since December
2022, to 4.8%. Seasonally-adjusted industrial electricity
sales, a proxy for industrial production in the state, took a
breather and fell by 1.5% in October after rising strongly in the
prior three months.
Housing starts rose for a second consecutive month in October,
but were nonetheless about 7% lower in the first ten months of the
year than in the same period of 2022. Led by sharp increases in
California's three largest metro
areas – Los Angeles, San Francisco, and San Diego – house prices rose for the ninth
consecutive month in October. House prices have fully recovered
from their decline in 2022 and are up 7.1% from their recent lows
in January 2023. Housing supply
constraints will continue to exert upward pressure on house prices.
Seasonally-adjusted hotel occupancy declined on the month and also
on the year, while air passenger traffic declined for the fourth
consecutive month, pointing to softer activity in the critical
tourism sector. Real state fiscal revenues are down sharply in the
current fiscal year from the same period in the previous year,
reflecting much lower personal income and corporate tax
receipts.
California's real GDP grew
robustly in the first three quarters of 2023 following modest 0.7%
annual growth in 2022. But Comerica's California Index suggests the
Golden State's economy likely lost momentum in the fall amid
headwinds to housing, high interest rates, persistent inflation,
and slowing consumer spending. On top of these issues weighing on
the national economy, the tech slowdown is still an incremental
negative for the Golden State.
The Comerica California Economic Activity Index is a monthly
composite indicator of state economic activity. The Index provides
a wholistic advance view of the state of California'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, foreign trade,
enplanements, hotel occupancy, and state revenues. 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, a subsidiary of Comerica Incorporated (NYSE:
CMA), is 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 building relationships and
helping people and businesses be successful, providing more than
400 banking centers across the country with locations in
Arizona, California, Florida, Michigan and Texas. Founded 175 years ago in Detroit, Michigan, Comerica continues to
expand into new regions, including its Southeast Market, based in
North Carolina, and Mountain West
Market in Colorado. Comerica has
offices in 17 states and services 14 of the 15 largest U.S.
metropolitan areas, as well as Canada and Mexico. Comerica reported total assets of
$85.8 billion at Dec. 31, 2023. Learn more about how Comerica is
raising expectations of what a bank can be by visiting
www.comerica.com, and follow us
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SOURCE Comerica Bank