DETROIT–Comerica Bank’s Michigan Economic Activity Index increased in October to a level of 106.2.
The index is comprised of nine variables — nonfarm payroll employment, unemployment insurance claims, housing starts, a house price index, industrial electricity sales, auto assemblies, total trade, hotel occupancy, and state sales tax revenue.
All data are seasonally adjusted, with nominal values converted to constant dollars. The index is also expressed as a three-month moving average.
During October, Comerica economic officials reported mixed results, with four out of nine components positive for the month — nonform employment, unemployment insurance claims, housing starts, and house prices. Five components were negative — industrial electricity sales, light vehicle production, total state trade, hotel occupancy, and sales tax revenue.
Officials said the rate of improvement in the Michigan index has declined in each of the last three months, with the slowdown expected to continue through the numbers for the rest of 2020 and into 2021, as a coronavirus resurgence prompts more local and state economic shutdowns.
October’s reading was 22 percent higher than the historical low, reached earlier this year as part of the coronavirus economic slowdown.
Comerica officials said that while overall manufacturing conditions are improving globally, in the U.S. and in Michigan, the critical auto industry looks vulnerable to weaker sales this winter. Light vehicle production increased in November to an 11.0 million unit annual rate as sales slipped to a 15.9 million unit rate nationwide, down from 16.3 million in September and October. Surging coronavirus cases, combined with declining consumer confidence in December, may result in weaker auto sales and production this winter. Further drag may come from weaker U.S. personal income in December.
To subscribe to Comerica economic publications or for questions, email ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/insights.