Comerica Bank’s California Economic Activity Index fell one point in July, to a level of 101. July’s reading is three points below the 104 average for all of 2010, and seven percent above the index cyclical low. Year-to-date the index has averaged 103.
“The California economy continues to struggle for traction,” said Robert Dye, Chief Economist at Comerica Bank. “Consumer spending remains fundamentally constrained by a weak housing market and a downshift in global macroeconomic expectations is keeping hiring tentative. With the odds of a U.S. recession before the end of 2012 now near 50 percent, the California economy is on the bubble. The steady decline in our California index over the last five months is an ominous sign. A resurgent Silicon Valley remains a bright spot for the state economy but some high-tech industries are vulnerable to cooler markets and new restraints to government spending.”