Comerica Bank’s California Economic Activity Index dropped in September, falling two points to a level of 100. September’s reading is six percent above the index cyclical low of 94. Year-to-date the index has averaged 102, two points below the 104 average for all of 2010.
“The California economy continues to struggle for traction, shown by the slide in our California Index through 2011,” said Robert Dye, Chief Economist at Comerica Bank. “Slow-to-moderate job growth this year has helped to broaden the state’s economic base. However, the state has a long way to go before it regains its pre-recession peak employment. California’s unemployment rate of 11.7 percent in October was higher than any other state except Nevada. Silicon Valley is hiring aggressively but that has little impact on the state’s large base of lower skilled workers. Housing market activity remains very weak in many areas and represents a large and fundamental drag on the state’s economy. Manufacturing activity for high tech firm is starting to cool after a strong rebound through 2010.”