Comerica Bank's California Economic Activity Index grew by 0.8 percentage points in July to a level of 121.7. July's reading is 38 points, or 45%, above the index cyclical low of 84.1. The index averaged 119.8 points for all of 2015, six and two-fifths points above the average for all of 2014. June's index reading was 120.9.
"The Comerica Bank California Economic Activity Index increased again in July, its fourth consecutive gain," said Robert Dye, chief economist at the bank. "Five out of eight index sub-components were positive for the month, including payroll jobs, state exports, unemployment insurance claims (inverted), housing starts and the NASDAQ 100 Tech Stock Index. In July, the state added a relatively weak 18.6 thousand jobs, but job growth bounced back in August. Real estate markets in Northern California are cooling relative to their overheated state over the last few years."
The bank's Texas Economic Activity Index dipped in July, down 0.9 percentage points to a level of 90.3. July's reading is 18 points, or 24%, above the index cyclical low of 72.8. The index averaged 97.5 points for all of 2015, seven and three-fifths points below the average for full-year 2014. June's index reading was 91.2.
"Our Texas Economic Activity Index dipped again in July due to a sizeable drop in the exports sub-index," said Dye. "Texas exports obviously include crude oil, petroleum products and natural gas. With oil prices low, crude oil production has dropped significantly. According to the Texas Railroad Commission, total oil production in Texas in July dipped to 85.3 million barrels, down 21% from the peak of 108.3 million barrels in December 2014. So lower economic activity in the state is a direct result of the reset in global oil markets."
Dye added, "Texas added 34,000 jobs in July, close to its average from 2011-2014, when oil field activity was surging."
Comerica Bank's Michigan Economic Activity Index declined 0.4 percentage points in July to a level of 129.4. July's reading is 55 points, or 75%, above the index cyclical low of 74.1. The index averaged 123.6 points for all of 2015, five and four-fifths points above the index average for 2014. June's index reading was 129.8.
"Our Michigan Economic Activity Index eased in July after increasing in June," said Dye. "We have seen an overall upward trend in the index, with a back-and-forth monthly pattern since late 2015. Job growth in Michigan is looking choppy. State payroll employment was up by 2.4% in July over the previous 12 months, but the month-to-month pattern has been jarred by net job losses in May and August. Ford Motor Company announced that they will move all small car production to Mexico over the next two-to-three years. They will use Michigan capacity for higher margin vehicles. Over time, we expect to see an overall decline in auto production from Michigan."