Comerica Bank's California Index Declines Sharply in September
The Comerica California Economic Activity Index saw a sharp decline of 5.8% annualized in the three months ending September 2022, despite a 5.8% year-over-year increase.
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Rhea-AI Summary
The Comerica California Economic Activity Index saw a sharp decline of 5.8% annualized in the three months ending September 2022, despite a 5.8% year-over-year increase. September showed a downturn with seven of the index's nine components falling. Employment saw a modest rise of 5,300, significantly below the 65,300 average in the previous months. Indicators suggest a softening labor market and declining industrial activity, with housing starts rising unexpectedly while house prices fell 6.8% since May. Challenges from high inflation, rising interest rates, and slowing consumer spending are anticipated.
Positive
- Year-over-year increase of 5.8% in the index.
- Modest employment growth in September.
Negative
- 5.8% annualized decline in the index over the last three months.
- Continuing claims for unemployment insurance rose for three consecutive months.
- Industrial electricity consumption fell by 3.2% in Q3.
- Significant decline in hotel occupancy rates by 4.6% and air passenger traffic by 10.2% in Q3.
- Weak housing market with a 6.8% drop in house prices since May.
Details
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DALLAS, Dec. 13, 2022 /PRNewswire/ -- The Comerica California Economic Activity Index declined at a
Seven of the Index's nine components fell in September. Employment rose, but by a modest 5,300, well below the 65,300 average gain of the first eight months of the year. Continuing claims for unemployment insurance rose for the third consecutive month, suggesting California's labor market is in fact softening. Electricity consumption by California's industrial sector fell in September and was down
Housing starts unexpectedly rose for a second consecutive month in September, while house prices fell for the fourth consecutive month and were down
California's economy faces headwinds from a weakening housing sector, rising interest rates, high inflation, and slowing consumer spending, and is expected to lose momentum in the coming months. The slowdown in the tech sector, a key industry of the Californian economy, is an additional 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 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
To subscribe to our publications or for questions, contact us at ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/insights.
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SOURCE Comerica Bank
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