Comerica Bank's Michigan Index Sees Slight Decline

DALLAS — Comerica Bank’s Michigan Economic Activity Index declined 0.2 percentage points in August to a level of 129.3.

The index is comprised of eight variables — nonfarm payrolls, exports, hotel occupancy rates, continuing claims for unemployment insurance, housing starts, sales tax revenues, home prices, and auto production. All data are seasonally adjusted, and indexed to a base year of 2008. Nominal values have been converted to constant dollar values. Index levels are expressed in terms of three-month moving averages.

“The Comerica Bank Michigan Economic Activity Index dipped again in August, after declining in July,” said Robert Dye, Comerica chief economist. “In the 13 months ending in August, the Michigan Index has declined eight times and increased five times. Overall, the recent trend still looks positive, but not overwhelmingly so. Only three out of eight index components increased in August. They were nonfarm employment, state exports and auto production. Initial claims for unemployment insurance (inverted), housing starts, house price index, and hotel occupancy all deteriorated in August, while state sales tax revenues were unchanged. We expect to see an ongoing economic expansion in Michigan through the first half of next year, but the rate of expansion will ease as the auto sector adjusts to stabilizing sales nationwide and small car production begins to migrate out of the state.”

The index averaged 123.6 points for all of 2015, five and four-fifths points above the index average for 2014. July’s index reading was 129.5.

August’s reading is 55 points, or 74 percent, above the index cyclical low of 74.1, hit at the bottom of the last recession in 2007-09.

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