Comerica Bank Michigan Index ticks up

DETROIT — Comerica Bank’s Michigan Economic Activity Index increased 0.2 percent in April to a level of 117.9.

The index is comprised of nine variables: nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, house price index, industrial electricity sales, auto assemblies, total trade, hotel occupancy and sales tax revenue.

All data are seasonally adjusted and converted to constant-dollar values. The index is also expressed as a three-month moving average.

Comerica officials noted that April’s increase was the third straight month the index rose, but that they “remain cautious in our view of the Michigan economy,” since the index has been little changed since mid-2016, indicating little momentum since the state’s strong acceleration out of the Great Recession in 2007-09.

In April, four of the nine variables rose — housing starts, house prices, total state trade and state sales tax revenue. Three components were negative: unemployment, industrial electricity demand and light vehicle production. Nonfarm employment and hotel occupancy were unchanged for the month.

The U.S. auto industry was buoyed by stronger-than-expected sales in May, which increased to a 17.4 million unit annual rate. But strains are apparent in the auto industry, particularly at the global level. Ford has announced a significant cutback in Europe. Ford intends to close five production facilities there and sell one more and eliminate some 12,000 jobs globally, including non-production jobs.

April’s reading was 20 points, or 20 percent, above the index cyclical low of 97.9, reached at the bottom of the Great Recession. The index averaged 118.4 points for all of 2018, 0.1 points above the index average for 2017. March’s index reading was 117.7.

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