Comerica Bank’s California Economic Activity Index ticked up one point in August, to a level of 102. August’s reading is two points below the 104 average for all of 2010, and nine percent above the index cyclical low of 94. Year-to-date the index has averaged 103.
“Job creation in California has stalled since last February, and that is a fundamental drag on the state’s economy, reflected in the dip in our California Index, visible since early this year,” said Robert Dye, Chief Economist at Comerica Bank. “A strong high-tech sector in Silicon Valley is not enough to overcome fundamental weakness in housing markets which has depressed house prices in many parts of the state. The California economy remains on the bubble, vulnerable to sliding back into recession. Recent flat port activity in Southern California may be a signal that retailers nationwide are expecting soft sales in the upcoming holiday shopping season. The ongoing crisis in the euro-zone adds downside risk to the global macroeconomic outlook which could be a further weight on the California economy.”