Comerica Bank’s Michigan Index improves

DETROIT—Comerica Bank’s Michigan Economic Activity Index increased in July to a level of 107.6, up from 107.3 in June.

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. In the index, all data are seasonally adjusted, adjusted for inflation, and expressed as a three-month average.

The index posted its eighth consecutive monthly gain in July, and has now recovered close to its pre-pandemic peak of 109.2 in February 2020. In July, six of the nine indicators rose—nonfarm employment, unemployment insurance claims, house prices, light vehicle production, total state trade, and hotel occupancy. Housing starts were unchanged, while industrial electricity sales and state sales tax revenues declined. Comerica economists said signs show a summer surge in COVID cases is easing, meaning there should be no increased restrictions on business for the remainder of the year. However, the manufacturing sector will continue to face the challenges of supply chain constraints and a tight labor market. Light vehicle assemblies increased for the second straight month in August to a 9.235 million unit annual rate, still well below the roughly 11 million unit rate trend through 2018 and 2019.

July’s reading was 25.4 percent higher than the historical low of 85.8 reached in June 2020. The index averaged 100 points for all of 2020, 9 points below the index average for 2019.

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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