DALLAS, Aug. 28, 2020 /PRNewswire/ -- Comerica Bank's
Texas Economic Activity Index decreased in June to 106.8. June's
index reading was 12 points above the index cyclical low of 95.5.
The index averaged 139.1 points for all of 2019, 3.8 points above
the average for 2018. May's index reading was 114.2
Our state economic activity indexes for June showed some further
deterioration in state economies. This is partially a result of
smoothing techniques that we use to process the data. We expect
Texas and other states to show
positive overall numbers in July and August reflecting states'
relaxation of their social mitigation policies. Even as we see
stronger Q3 data for the U.S. and most states, we caution against
assuming that this is a V-shaped economic recovery. After relaxing
some social mitigation policies in late spring, many states
experienced an uptick in COVID-19 cases by mid-summer requiring
them to tighten policies again. Now with the school year starting,
we remain cautious about the potential for increased COVID-19 cases
this fall. Also, the demand destruction from the spring shutdowns
is still reverberating through the economy. We expect most states,
including Texas, to face a
lingering high unemployment rate well into next year, and that will
be a drag on overall economic activity. In June, two of the nine
sub-indexes for Texas were
positive. They were house prices and hotel occupancy. The seven
negative sub-indexes were nonfarm employment, unemployment
insurance claims (inverted), housing starts, industrial electricity
demand, rig count, total state trade and state sales tax revenues.
Firmer oil prices will help the rig count to stabilize and
eventually improve. We expect to see an improving trend by year
end.
The Texas Economic Activity Index consists of nine variables, as
follows: nonfarm payroll employment, continuing claims for
unemployment insurance, housing starts, house price index,
industrial electricity sales, Texas rotary rig count, total trade, hotel
occupancy and sales tax revenue. All data are seasonally adjusted.
Nominal values have been converted to constant dollar values. Total
index levels are expressed in terms of three-month moving
averages.
Comerica Incorporated (NYSE: CMA) is a financial services
company headquartered in Dallas,
Texas, and strategically aligned by three business segments:
The Commercial Bank, The Retail Bank, and Wealth Management.
Comerica focuses on relationships, and helping people and
businesses be successful. In addition to Texas, Comerica Bank locations can be found in
Arizona, California, Florida and Michigan, with select businesses operating in
several other states, as well as in Canada and Mexico. Comerica reported total assets of
$84 billion at June 30, 2020.
To subscribe to our publications or for questions, contact us at
ComericaEcon@comerica.com. Archives are available at
http://www.comerica.com/insights. Follow us on Twitter:
@Comerica_Econ.
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SOURCE Comerica Bank