Comerica Bank’s Michigan index improves
DALLAS, July 20, 2021 / PRNewswire / – The Michigan Economic Activity Index from Comerica Bank rose in May to 106.7. The May reading was 24.4% above the all-time low of 85.8 reached in june 2020. The index averaged 100 points for the whole of 2020, 9.0 points lower than the index average for 2019. The April index reading has been revised to 105.5.
Our Michigan Economic Activity Index rose for the sixth consecutive month in May and has shown rising growth rates for the past three months. It is gratifying to see the Michigan index move closer to its pre-crisis level in early 2020. Six of the nine components were positive for May, including housing starts, house prices, light vehicle production. , total state trade, hotel occupancy and state tax revenue. Unemployment insurance claims and industrial electricity demand were negative for the month. Non-farm employment was neutral. Unfortunately, we know from US industrial production data for June that US vehicle assemblies for June fell after rising in May. Several automobile factories in Michigan have either cut production or shut down for extended periods of time this summer due to the global shortage of computer chips and other supply chain constraints. This will weigh on the July and August labor data for Michigan. We expect job growth to be strong this fall as auto production gradually normalizes and improved unemployment benefits expire. Despite low sales this summer due to lack of inventory, we expect automotive demand to remain strong. It will eventually be spent as dealer inventories are replenished. We expect back-to-work and back-to-school programs this fall to allow more households to normalize their routines and promote demand for new cars.
The Michigan Economic Activity Index consists of nine variables, as follows: non-farm payroll employment, ongoing UI claims, housing starts, house price index, industrial electricity sales, automotive assemblies, total trade, hotel occupancy and tax revenues. All data is 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 lines: commercial banking, retail banking and wealth management. Comerica focuses on relationships and helps people and businesses succeed. In addition to Texas, the branches of Comerica Bank are located in Arizona, California, Florida and Michigan, with selected companies operating in several other states, as well as in Canada and Mexico. Comerica declared total assets of $ 86.3 billion at March 31, 2021.
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