Comerica Bank’s Michigan Index Continues to Gain

DETROIT — Comerica Bank’s Michigan Economic Activity Index increased 0.3 percentage points in June to a level of 132.5, up from 132.2 in May.

The index consists of eight variables: nonfarm payrolls, exports, hotel occupancy rates, continuing claims for unemployment insurance, housing starts, sales tax revenues, house prices, and auto production. All data are seasonally adjusted, and indexed to a base year of 2008. All values are converted to constant dollars and are expressed in terms of three-month moving averages.

Comerica Chief Economist Robert Dye noted that the index “has now increased for eight out of the last nine months. Five out of eight sub-indexes were positive in June, including nonfarm payrolls, unemployment insurance claims, housing starts, house prices, and state sales tax revenue. State exports, auto production and hotel occupancy decreased in June. A moderately expanding U.S. economy combined with a globally synchronized economic expansion in the presence of a declining dollar is good news for the Michigan economy. The success of Michigan’s manufacturing sector since the Great Recession has created positive conditions for the service sector. We expect Michigan’s service sector to continue to expand through the second half of this year and drive job creation in the state. Michigan’s manufacturing sector remains strong, but auto sales and auto production have both declined this year. We expect that trend to continue and weigh on state job growth late this year and into 2018.”

June’s reading is 58 points, or 79 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 one-fifth points above the index average for 2015.

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