Comerica Bank's Michigan Index Shows Some Lift

DETROIT — The Michigan Economic Activity Index compiled by Comerica Bank rose a solid 1.3 percentage points in May to a level of 132.1.

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, converted to constant-dollar values, and indexed to the base year of 2008. The index is also expressed as a three-month moving average.

May’s reading is 58 points, or 78 percent, above the index cyclical low of 74.1, reached at the bottom of the last recession.

The index averaged 127.7 points for all of 2016, four and two-tenths points above the index average for 2015. April’s index reading was 130.8.

Comerica Bank Chief Economist Robert Dye noted that the index “increased, pulling out of a five-month stall from December 2016 through April 2017. Four index components were positive in May. They were state exports, unemployment insurance claims, house prices and hotel occupancy. Housing starts, auto production and state sales tax revenues were negative factors in May. The nonfarm employment sub-index was unchanged. With U.S. auto sales easing this year, we look for less push from Michigan’s auto sector going forward. Non-auto-related manufacturing and the service sector can keep the state economy engaged but it will be difficult to overcome the drag from the auto sector if national auto sales continue to deteriorate. Michigan’s unemployment has dropped sharply in recent months, down to 3.8 percent in June, still above the low of 3.2 percent from early 2000.”

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