Comerica Bank’s Michigan Index inches up

DETROIT–The Michigan Economic Activity Index from Comerica Bank rose in November to 106.3 from 106.2 in October.

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 state trade, hotel occupancy and sales tax revenue. All data are seasonally adjusted, converted to constant-dollar values, and expressed as three month moving averages,

Comerica officials said only three of the index’s nine variables rose in November–nonfarm payrolls, unemployment insurance claims, and house prices. Declining during the month were housing starts, industrial electricity demand, light vehicle production, total state trade, hotel occupancy and state sales tax revenue.

They said there could be a decline in the Michigan Index at year end reflecting strains in the U.S. economy and social mitigation policies at the regional level. On the plus side, most national and regional manufacturing indicators improved in December, good news for manufacturing-intensive Michigan.

Through December, payroll employment for Michigan was down 10.9 percent from a year earlier, while the equivalent U.S. metric was down by 6.2 percent. Last spring, Michigan’s unemployment rate spiked to 24 percent in April, well above the U.S. rate of 14.8 percent at that time. As of December, Michigan’s unemployment rate had declined to 7.5 percent, only moderately above the U.S. rate of 6.7 percent.

Comerica officials said they look for improving conditions in Michigan this spring as vaccine distribution ramps up, and massive fiscal stimulus hits the economy along with very low interest rates.

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

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