DALLAS, Jan. 22,
2024 /PRNewswire/ -- The Comerica Michigan
Economic Activity Index rose 7.2% annualized in the three months
through October, reversing a drop in the prior three months.
Nonetheless, the Index was still down 0.4% from a year earlier, and
declined in those terms for most of 2023. Six of the index's nine
components fell in October, while three rose.
Reflecting the effects of the United Auto Workers strike,
employment in the Great Lakes State fell 13,000 in October and
13,700 in September. Similarly, continuing claims for unemployment
insurance and the unemployment rate rose further in October. The
Michigan labor market is likely to
recover to its pre-strike condition in early 2024, since the strike
ended before 2023's critical holiday shopping season.
Auto and light truck assemblies slumped by 1.6 million to 8.9
million annualized units in October. Industrial electricity use
also fell. The timeliest data on auto production, which are not yet
incorporated into the index, largely rebounded to pre-strike levels
in late 2023. Housing starts rose by a sharp 8.5% in October,
the fourth consecutive monthly increase, but were still down 1.3%
from a year earlier. Despite the gains in the past few months,
housing starts through October 2023
were 14.1% down from the same period of 2022. With listings
tight, house prices rose sharply for the eighth consecutive month
and have now more than reversed their decline from mid-2022 to
early-2023. Seasonally-adjusted hotel occupancy declined on the
month and also from a year earlier. Sales tax receipts, adjusted
for seasonality and price differences, were also lower on a monthly
and annual basis in October, indicating that consumer spending
softened during the strike.
Michigan's real GDP grew by
1.6% in 2022, below the national average of 1.9%. The state's
economy grew at a more subdued pace in the first three quarters of
2023 compared to the same period of the prior year and lagged
behind the national growth rate. Michigan's economy will likely slow along with
the national economy in late 2023 and into 2024. High interest
rates will slow output and sales in credit-intensive sectors, such
as housing, manufacturing, and commercial real estate. Carmakers'
margins will likely be pressured by the combination of higher labor
costs and increasing pricing competition amid many new EV models
coming to market.
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, 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