Comerica Bank’s Michigan Economic Index improved in February, but trouble ahead

DETROIT—It may be the last month of improvement before the pandemic slump, but Comerica Bank reported that its Michigan Economic Activity Index increased in February to a level of 118.6, from a revised January reading of 117.9.

The index is comprised of nine variables—nonfarm payroll employment, continuing claims for unemployment insurance, housing starts, a house price index, industrial electricity sales, auto assemblies, total trade, hotel occupancy and sales tax revenue. Eight of those nine variables were positive in February, with only the auto assembly index unchanged for the month.

Bank officials said that the February index “does not fully reflect the swift and powerful contraction in the U.S. economy this spring due to the global coronavirus pandemic.” That contraction, bank officials said, would begin showing up in the March index, and a “significant deterioration” to follow in the April data.

In the index, all data are seasonally adjusted, converted to constant dollar values, and expressed as a three-month moving average.

February’s reading was 21 points, or 21 percent, above the index cyclical low of 97.9, reached at the bottom of the last recession in 2007-09. The index averaged 117.7 points for all of 2019, 0.9

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

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