Comerica Bank’s Michigan Index up again

DETROIT — Comerica Bank’s Michigan Economic Activity Index increased in April to a level of 119.0.

The index is comprised of nine variables — nonfarm payroll employment, continuing claims for unemployment insurance, house prices, vehicle assemblies, state trade, hotel occupancy, state sales tax revenues, housing starts, and industrial electricity demand.

Of the index items, seven were positive — payrolls, unemployment claims, house prices, vehicle assemblies, state trade, hotel occupancy, and state sales tax revenues. Two were negative — housing starts and industrial electricity demand.

It was the second straight monthly gain for the index, which stalled from December through February. Looking ahead, Comerica officials said they have noted a sharp drop in vehicle assemblies in May, indicating this could become a drag on the Michigan index this summer. Also, they said in a press release, trade actions by the United States and retaliations by trading partners “have increased uncertainty for many Michigan businesses. Some businesses are responding by reducing borrowing and delaying investment. This could also weigh on hiring.”

Higher gasoline prices were also described as a negative for Michigan’s auto industry — up 60 cents a gallon from a year ago.

April’s reading is 21 points, or 22 percent, above the index cyclical low of 97.9, reached at the bottom of the last recession. The index averaged 118.2 points for all of 2017, one point above the index average for 2016. March’s index reading was revised to 118.7.

All data in the index are seasonally adjusted. Nominal values have been converted to constant dollar values. Index levels are expressed in terms of three-month moving averages.

To subscribe to our Comerica economic publications or for questions, contact us at ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/insights.

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