Comerica Bank’s Michigan Index plunges to all-time low

DETROIT—Comerica Bank’s aEconomic Activity Index declined in May to a level of 90.3, a new historical low for the index.

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 the nine variables declined in May; only the house price index rose. Bank officials also noted that house price data for Michigan has been limited this spring, so Comerica economists are making estimates that may be revised later.

They also noted that auto production did resume in May, with a further increase in June to an 8.3 million unit annual rate, though that’s still well below the 10.6 million unit average rate for 2019.

Michigan is also among the states that saw an increase in coronavirus infections through July. As a result, Gov. Gretchen Whitmer extended her emergency declaration through Aug. 11, limiting public gatherings and service at bars. The economists said they expect to see improvement in the Michigan Index in the next few months, but the that index will likely not return to its pre-crisis level this year.

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

The index averaged 117.7 points for all of 2019, 0.9 points below the index average for 2018. April’s index reading was revised to 102.4.

Michigan is also among the states that saw an increase in coronavirus infections through July. As a result, Gov. Gretchen Whitmer extended her emergency declaration through Aug. 11, limiting public gatherings and service at bars. We expect to see improvement in the Michigan Index in the next few months, but the index will likely not return to its pre-crisis level this year.

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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