Comerica Bank’s Michigan Index Stays in Neutral

DETROIT — Comerica Bank’s Michigan Economic Activity Index fell 0.1 percentage points in April to a level of 130.8.

The index consists of eight variables — nonfarm payrolls, exports, hotel occupancy rates, continuing claims for unemployment insurance, housing starts, sales tax revenues, house prices, and auto production.

All data are seasonally adjusted, and indexed to a base year of 2008. Nominal values have been converted to constant dollar values. Index levels are expressed in terms of three-month moving averages.

Comerica Chief Economist Robert Dye noted that the index ” was essentially unchanged from March, about where it has been for the last five months. Five out of eight index components were positive in April, including nonfarm employment, unemployment insurance claims, housing starts, house prices and hotel occupancy. State exports, auto production and sales tax receipts were negative factors for the month. We expect national auto sales for the remainder of this year to remain below last year’s record-setting pace. Auto production will likely remain a slight drag on the index through the second half of this year. As auto production has eased, so has job growth in Michigan. For the year ending in April, nonfarm payrolls were up 1.7 percent in Michigan, still above the U.S. average of 1.5 percent. However, job growth will likely fall below the U.S. average in the second half of this year.”

April’s reading was 57 points, or 77 percent, above the low of 74.1 hit at the bottom of the last recession in 2007-09. The index averaged 127.7 points for all of 2016, four and one-tenth points above the index average for 2015.

To subscribe to Comerica economics publications or for questions, email ComericaEcon@comerica.com. Archives are available at http://www.comerica.com/economics.

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